Car Finance Commission Claims: Your Questions Answered

At a glance

What actually happened

For years, some car dealers arranging finance on a customer's behalf could increase their own commission by setting a higher interest rate on the loan — a 'discretionary commission arrangement' — without clearly telling the customer. The FCA banned this specific practice in January 2021. A series of court cases culminated in a 2025 Supreme Court ruling that reshaped how these older arrangements are treated, and the regulator responded by designing an industry-wide redress scheme.

What the FCA's scheme covers

In March 2026 the FCA published policy statement PS26/3, confirming a consumer redress scheme requiring lenders to proactively review historical agreements involving discretionary commission and pay compensation where a customer likely lost out. The scheme is broadly aimed at agreements from 2007 to 2021, the period during which discretionary commission models were legal but not always disclosed. As of mid-2026, parts of the scheme face ongoing legal challenges from lenders, and consumer sites including MoneySavingExpert have reported the practical rollout — and payouts — may be delayed, potentially into 2027.

Do you need to do anything right now?

1. Check whether you had dealer-arranged HP or PCP finance between 2007 and January 2021.
2. You do not need to hire a claims management company — you can complain directly to the lender for free, and if unhappy with the response, escalate free of charge to the Financial Ombudsman Service.
3. Keep any paperwork (finance agreement, dealer correspondence) but don't worry if you no longer have it — lenders are required to hold records.
4. Watch for scam calls and texts referencing 'car finance refunds' asking for upfront fees or bank details — legitimate claims never require payment upfront.

What compensation might look like

Where the FCA scheme applies, affected customers may be offered a refund of some interest paid, plus interest on that refund, without needing to prove individual loss — the review is meant to be done by lenders using standard methodology. Amounts vary hugely by loan size, term and commission structure, so avoid trusting any online 'calculator' promising a specific payout figure before the scheme's detail is finalised.