Regulator says 14 million people likely to get on average of 700£ per agreement each in car finance mis-selling payouts

The financial regulator has confirmed that as many as 14 million UK agreements could qualify for car finance mis-selling payouts after years of undisclosed commission practices between dealers and lenders. If you had PCP or HP before 28 January 2021, you may be eligible.

Most people affected by car finance mis-selling could receive a few hundred pounds each, with averages commonly quoted below £950. The FCA plans to consult on an industry-wide redress scheme in early October 2025, with a view to payments beginning in 2026 (subject to the consultation and any legal challenges).

What is the car finance mis-selling issue?

Before 2021, many lenders allowed brokers or car dealers to adjust the interest rate on your finance. The higher the APR they set, the more commission they could earn—often without clear disclosure. This was known as a discretionary commission arrangement (DCA), and the FCA banned DCAs from 28 January 2021.

Although a recent Supreme Court decision limited some legal routes against lenders, it affirmed that a court can still find an “unfair relationship” under s.140A of the Consumer Credit Act where the non-disclosure and commission level make the deal unfair. This continues to underpin claims and the regulator’s proposed scheme.

Who’s likely eligible for car finance mis-selling payouts?

You’re more likely to qualify if:

• You had a PCP or HP agreement between April 2007 and 28 January 2021.
• Your deal involved a DCA (dealer/broker could vary interest and earn more commission).
• You were not told clearly about commission or how it might inflate the APR you paid.
• Your monthly repayments or total interest look higher than comparable quotes at the time.

How much could you receive?

While every case is different, public statements and news reporting indicate average car finance mis-selling payouts could be in the low hundreds, with many reports placing typical awards below ~£950. Some may receive more where overcharges and interest were significant.

Simple estimate table (illustrative)

Scenario	Possible outcome (guide only)
Minor APR uplift due to DCA	£100–£300
Moderate APR uplift over several years	£300–£700
Larger uplift and interest overcharge	£700–£950+

These are not guaranteed figures; final amounts will depend on your agreement, disclosure, overcharge and the methodology set by the FCA scheme.

Key dates and timeline

• Early October 2025: FCA consultation on an industry-wide compensation scheme (likely six weeks).
• 2026: The FCA expects a critical mass of payouts to begin once rules are finalised (subject to consultation outcomes and possible challenges).

What evidence should you gather now?

To prepare for car finance mis-selling payouts, start collecting:

• Finance agreement (PCP/HP), schedules and APR.
• Dealer or broker correspondence, order forms, invoices and any commission disclosures.
• Bank statements showing payments.
• Credit reports confirming account details (helpful if records are old).

Why act now?

Record-keeping gets harder over time, and some lenders say old data is limited. However, the regulator has indicated third-party sources (like credit reference agencies) can supplement missing data. Preparing early helps ensure a smoother claim process when the scheme opens.

Frequently Asked Questions – Mis-sold Vehicle Finance

1. Does the Supreme Court ruling stop claims?

No. While the Court cut back certain legal avenues (for example, no general fiduciary duty owed by dealers), it confirmed that a s.140A “unfair relationship” analysis can succeed depending on the facts. The FCA’s proposed scheme reflects that reality.

2. What if I don’t know whether there was a DCA?

Many consumers weren’t told, which is part of the problem. If your APR seemed higher than expected or inconsistent with your credit profile, you may still benefit under the scheme’s standardised methodology for redress.

3. Is this like PPI?

It’s similar in that it targets a widespread practice and aims to deliver consistent redress, but the FCA intends to set cut-off dates to avoid a decade-long process.

Compliance & authority: what the law and regulators say

• FCA — Consultation on an industry-wide motor finance compensation scheme and background on banning DCAs.
• Consumer Credit Act 1974, s.140A — Courts can remedy unfair relationships (even after agreements end).
• Latest UK news — Widespread coverage confirms ~14 million potentially eligible and average awards in the hundreds, with timelines pointing to 2026 for initial payouts.

Next steps: make your claim with National Claims

1. Check eligibility — PCP/HP between 2007 and 28 January 2021? Higher-than-expected APR? Limited or no commission disclosure?
2. Gather documents — Agreements, payment history and any emails or dealer paperwork.
3. Start your claim — We’ll assess your case for car finance mis-selling payouts, build the evidence and position it for the regulator’s scheme.
4. Stay updated — We’ll keep you informed on the FCA’s consultation outcome and practical steps to maximise your compensation.

Don’t wait while your claim window closes. Speak with National Claims today. We’ll connect you with experienced solicitors who understand your case and fight for the maximum compensation you deserve.