The FCA car finance compensation scheme is now confirmed, opening the door for millions of UK drivers to claim back money they were overcharged. The scheme covers 12.1 million car finance agreements taken out between 6 April 2007 and 1 November 2024, where lenders failed to disclose commission arrangements to borrowers. If you took out a PCP or hire purchase agreement during that period, you could be owed compensation and the process is simpler than you might think.
What Is the FCA Car Finance Compensation Scheme?
For years, millions of UK drivers took out car finance without knowing a crucial detail: their lender was paying hidden commissions to the dealer. That commission arrangement influenced the interest rate you were offered — and in many cases, you ended up paying more than you should have.
A Supreme Court ruling in August 2025 found that while commission payments can be legal, failing to disclose them properly can be unfair — and in some cases unlawful. Carwow Following that ruling, the Financial Conduct Authority stepped in to design a structured response.
Courts found that firms broke the law by failing to disclose important information to customers. An industry-wide scheme is the quickest and most cost-effective way to deliver fair compensation. FCA
The scheme will put £7.5 billion back in people’s pockets, with millions of claims settled in 2026 and the vast majority resolved by the end of 2027. Financial Conduct Authority This is one of the largest consumer redress programmes in UK financial history.
The Two Routes: How the Scheme Works
The FCA has structured the scheme into two separate routes depending on whether or not you have already made a complaint. Understanding which route applies to you is important.
A. Route 1 — You Have Already Complained (or Complain Before the Deadline)
People who have already complained, or who complain before the end of the relevant implementation period, will be compensated sooner. Lenders will have 3 months from the end of the implementation period to inform complainants whether they are owed compensation and how much.
The implementation deadline is 30 June 2026 for loans taken out from 1 April 2014. FCA For older agreements, the deadline extends slightly further. Complaining now puts you at the front of the queue.
B. Route 2 — You Have Not Yet Complained
If you have not yet complained, lenders have 6 months from the end of the implementation period to contact those who are potentially owed money. You then have 6 months to respond. If you are not contacted, you can still complain to your lender by 31 August 2027.
However, waiting means a longer wait for any payout. Acting now through Route 1 gives you a significantly faster resolution.
Am I Eligible to Claim?
Eligibility is broader than many people realise. You may be able to claim if:
- You took out a PCP (Personal Contract Purchase) or hire purchase (HP) car finance agreement
- Your agreement was taken out between 6 April 2007 and 1 November 2024
- Your lender did not properly disclose the commission arrangement with the dealer
- Your loan was not a 0% APR deal or involved only a minimal commission
- Your finance was for a car, van, motorbike, or motorhome
You don’t need paperwork — your lender must check their own records. Mlj Many people worry they have lost their original documents, but that is not a barrier to making a claim.
There are some exclusions to be aware of. Claims for high value loans — amounts higher than 99.5% of other loans in that year — are not covered by the scheme, which is designed for the mass market. FCA Additionally, where a lender can demonstrate a visible link between a manufacturer and a dealer, a contractual tie alone will not trigger compensation.
What Compensation Could You Receive?
If you bought a car, van or motorbike on PCP or hire purchase between 2007 and 2024, you could be one of millions due £829 each on average. moneysavingexpert That said, individual payouts will vary depending on the size of your loan, the commission involved, and how long you held the agreement.
| Situation | Estimated Compensation | Notes |
|---|---|---|
| Standard PCP/HP agreement (2014–2024) | Up to £829 average | Based on FCA modelling at 75% uptake |
| Older agreement (2007–2014) | Variable, potentially higher | FCA adjusted calculations to reflect greater loss in this period |
| Multiple agreements | Per agreement | Each eligible agreement assessed individually |
| Capped cases | Reduced award | Around 1 in 3 cases will be capped |
These figures are FCA estimates based on scheme modelling. Your actual award depends on the specific facts of your agreement.
Simple interest will be paid on compensation, based on the annual average Bank of England base rate per year plus 1%, from the date of overpayment to the date compensation is paid. The minimum interest rate consumers will receive for any year is 3%.
How the Claims Process Works
- Contact National Claims first. Our team will assess your situation and connect you with experienced solicitors who understand motor finance mis-selling claims.
- Gather your basic details. You will need the approximate dates of your finance agreement and the name of the lender or dealership. You do not need original paperwork.
- Your solicitor submits your complaint. A formal complaint is lodged with your lender before the relevant deadline, placing you in Route 1 for faster resolution.
- Your lender investigates. Lenders have three months to tell claimants whether they are owed compensation and how much.
- You receive your offer. If compensation is confirmed, you will receive a written offer setting out the amount and how interest has been calculated.
- You accept or escalate. If you disagree with the outcome, you will be able to file a complaint with the Financial Ombudsman.
- Compensation is paid. Funds are transferred directly to you, minus any agreed solicitor fees.
Why Choose National Claims?
- Experienced solicitors on your side. We connect you with legal professionals who handle financial mis-selling claims every day and know exactly how to navigate the FCA scheme.
- No upfront costs. You will not pay a penny to begin your claim. Solicitor fees are only applied if your claim succeeds.
- We handle the complexity. From identifying your lender to submitting your complaint before the deadline, our team manages the process so you don’t have to.
- Trusted by thousands of claimants. National Claims has a strong track record connecting clients with solicitors who secure the maximum outcome.
Frequently Asked Questions
Q1: Do I need a claims management company to claim car finance compensation?
A: No, the FCA scheme is free to use directly. However, using an experienced solicitor through a regulated firm like National Claims ensures your complaint is submitted correctly, on time, and with the strongest possible case presented to your lender.
Q2: How long do I have to make a car finance mis-selling claim?
A: If you want to be placed in the faster Route 1, you should complain before 30 June 2026 for agreements from April 2014 onwards. If you miss that deadline, you can still complain directly to your lender by 31 August 2027.
Q3: Will making a claim affect my credit score?
A: Making a complaint about a past finance agreement does not negatively affect your credit score. The claim relates to historical conduct by the lender, not your current creditworthiness.
Q4: What if I no longer have my finance agreement documents?
A: You do not need them. Your lender is required by the FCA scheme to check their own records. Simply providing the approximate dates and the name of your lender or dealership is sufficient to begin.
Q5: How much could I receive in car finance compensation?
A: The FCA estimates an average payout of £829 per eligible agreement. Your actual figure depends on the loan size, commission involved, and the duration of the agreement. Interest is added from the date of overpayment, so older agreements may attract higher total amounts.
Why Use a CMC for Your PCP Compensation Claim?
Using a CMC for your PCP compensation claim gives you expert support, deadline management, and a significantly stronger chance of maximising your payout under the FCA’s new motor finance redress scheme. The FCA confirmed its car finance compensation scheme on 30 March 2026, covering 12.1 million agreements and an estimated £7.5 billion in total redress. While you can complain directly to your lender, many claimants who go it alone make avoidable mistakes that cost them money or miss the window entirely.
Start Your Car Finance Claim Today
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.
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About National Claims
This article was written by the National Claims content team. Our specialists have years of experience helping people across the UK with personal injury, road traffic accident, and housing disrepair claims. We work alongside regulated solicitors to ensure our information is accurate, up-to-date, and genuinely useful for anyone seeking to understand their rights after an accident.
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