Were You Mis-Sold Car Finance?
You may have been mis-sold car finance if a dealer arranged it between 6 April 2007 and 1 November 2024, was paid commission you were not told about, or steered you onto a deal because it paid them more. The Financial Conduct Authority (FCA) estimates around 37% of agreements in that window are eligible for its redress scheme, but mis-selling is not automatic and is decided case by case.
Below are five warning signs to look for. Recognising one or more does not guarantee a payout, but it may mean it is worth checking your agreement. Importantly, you can complain to your lender directly for free at any time — you do not need to use a claims management company.
The 2025 Supreme Court ruling and the FCA redress scheme
This section is dated 8 June 2026 and reflects the position at that date.
On 1 August 2025 the Supreme Court handed down its judgment in the joined cases of Hopcraft, Johnson and Wrench ([2025] UKSC 33). Contrary to some headlines, the court mostly sided with the lenders. It held that car dealers are generally not acting as your fiduciary, and it dismissed the bribery and secret-commission arguments, overturning the more consumer-friendly Court of Appeal decision of October 2024. The court upheld only one narrower claim — Mr Johnson's case under the "unfair relationship" provisions of section 140A of the Consumer Credit Act 1974. There is therefore no automatic, blanket payout for everyone who had car finance. Redress instead flows through a scheme run by the FCA.
The FCA confirmed its industry-wide redress scheme in Policy Statement PS26/3 on 30 March 2026. Key points (source: FCA, 2026):
- It is free to take part and applies across the industry.
- It covers car, van, motorbike and campervan hire purchase (HP) and PCP agreements taken out between 6 April 2007 and 1 November 2024 where commission was paid, with rules split at 1 April 2014.
- It covers discretionary commission arrangements (DCAs), other high-commission arrangements and undisclosed ties — not DCA cases only.
- The FCA estimates around 37% of agreements are eligible — roughly 12.1 million agreements.
- Once you accept an offer, the lender must pay you within one month.
Current status — please read. The scheme is under legal challenge, filed around 1 May 2026, with an Upper Tribunal hearing unlikely before October 2026. The FCA has said this will delay payouts. For that reason, no one can promise that money is being paid out now, and there are no firm deadlines we can rely on yet. Timescales are genuinely uncertain.
What you might receive. The FCA's figures put average redress at around £830 per agreement (£829 in PS26/3) for agreements that qualify. This is an FCA average across many agreements — it is not a typical or guaranteed individual payout. Amounts vary widely, around one in three are capped, and some people will receive nothing. Across the industry the FCA expects roughly £7.5bn in redress (about £9.1bn including firms' costs).
Sign 1: You were not told about commission
When a dealer arranged your finance, the lender usually paid them a commission. In many cases that commission was linked to the interest rate you were charged — the higher the rate, the bigger the dealer's payout. These discretionary commission arrangements (DCAs) were banned by the FCA on 28 January 2021. However, the redress scheme reaches up to 1 November 2024 and also covers other undisclosed or high-commission arrangements, not only DCAs.
How to spot it:
- You had no idea the dealer earned money from arranging your finance
- Commission was never mentioned during the sales conversation
- If it appeared in your paperwork at all, it was buried in dense terms and conditions
- The amount of commission was not specified
If you cannot recall the dealer explaining that they received a commission from the lender, that may be relevant — though whether it amounts to mis-selling depends on the facts of your case. Read more about how hidden commission works and what the FCA found.
Sign 2: You were steered towards a specific finance product
Good practice means a dealer should present your options and let you choose what works best for you. A possible sign of mis-selling is a dealer actively pushing you towards a particular product — sometimes the one that earned them the most commission.
How to spot it:
- The dealer only discussed one type of finance (usually PCP)
- You were not told about alternatives like HP, bank loans, or paying cash
- PCP was presented as the only sensible option
- You asked about other options and were discouraged or given vague reasons why they would not work
- The dealer made it sound like the finance deal was exclusive or time-limited to create urgency
If your dealer only ever mentioned PCP and moved quickly to paperwork, that may be worth questioning. Our PCP vs HP comparison outlines how the different types work.
Sign 3: Key terms were not properly explained
Car finance agreements come with significant terms and conditions, and dealers were expected to explain them clearly. Where they did not, that may support a complaint.
How to spot it:
- You did not fully understand the balloon payment on your PCP deal
- Mileage restrictions were not clearly explained (or the consequences of exceeding them)
- The total amount payable over the full term was not made clear
- You were surprised by fees or charges during or at the end of the agreement
- The difference between the APR and flat rate was not explained
- You did not understand what would happen when the agreement ended
If you left the dealership without a clear understanding of what you had signed up for, the dealer may have fallen short of their duty to explain.
Sign 4: No proper affordability assessment was carried out
Lenders and brokers are required to check that you can afford the finance before approving an agreement. This is a regulatory obligation designed to prevent people from taking on unmanageable debt.
How to spot it:
- The dealer did not ask detailed questions about your income, expenses, or existing debts
- The application process was unusually fast
- You were approved despite having a low income or existing financial commitments
- The dealer seemed unconcerned about your ability to afford the payments
- You subsequently struggled to make repayments
- No one asked about your employment status or financial situation
If the finance was approved without any real assessment of whether you could afford it, that may indicate a failure in the dealer's and lender's obligations.
Sign 5: You felt pressured into the decision
Buying a car is a significant purchase, and you should not feel rushed into signing a finance agreement. High-pressure selling can be a sign of poor practice.
How to spot it:
- You were told the deal was only available "today"
- The dealer discouraged you from taking the agreement home to review
- You felt uncomfortable but signed anyway because of the sales pressure
- The dealer suggested that if you did not act immediately, you would lose the car or the deal
- You were made to feel that questioning the terms was unreasonable
- The process felt rushed, with paperwork pushed in front of you quickly
A reputable dealer gives you time to consider and encourages you to read the full agreement before signing.
Quick checklist: signs and why they may matter
| Sign | Why it may indicate mis-selling |
|---|---|
| You were never told the dealer earned commission | Undisclosed or discretionary commission may have inflated your interest rate; this is central to the FCA scheme |
| You were steered onto one product (usually PCP) | Suggests the dealer prioritised their commission over presenting your real options |
| Key terms were not explained | A dealer that did not explain balloon payments, mileage limits or total cost may have fallen short of their duty |
| No real affordability check was done | Approving finance without assessing affordability can breach lender and broker obligations |
| You were pressured or rushed | High-pressure tactics can point to an unfair sales process |
This table is a guide only. Whether any of these amounts to mis-selling, and whether it falls within the FCA scheme, depends on your individual agreement and the dates involved.
Who may be eligible
The FCA scheme covers HP and PCP agreements taken out between 6 April 2007 and 1 November 2024 where commission was paid. A few clarifications that often cause confusion (source: FCA, 2026):
- The relevant window is 6 April 2007 to 1 November 2024 — not the 28 January 2024 date you may have seen, which related to a separate complaint-handling pause.
- Agreements you have already paid off or settled can still be eligible, and agreements held by people who have since died may also qualify.
- The scheme does not generally cover personal contract hire (PCH) leases, 0% finance deals, agreements with very small commission, the lowest-APR deals, or cases already decided by the Financial Ombudsman Service or a court.
What should you do if you recognise these signs?
If any of the above apply, it may be worth checking your agreement. Here is how to approach it.
Step 1: Gather what you can
Find your original finance agreement if you still have it. Check your emails, filing cabinets, or online accounts for any documents related to the purchase. Do not worry if you cannot find everything — we can work with what you have. Our guide on what documents you need explains what helps and what alternatives exist if paperwork is missing.
Step 2: Check whether your situation fits the scheme
Our eligibility guide covers the criteria in detail. In short, if you had dealer-arranged car or vehicle finance between 6 April 2007 and 1 November 2024 and commission was paid, it may fall within the FCA scheme — though eligibility is decided case by case.
Step 3: Complain — for free if you wish
You can complain directly to your lender for free, and you do not need to use a claims management company. The Financial Ombudsman Service is also free if you are unhappy with your lender's response. Some people prefer a specialist to handle the paperwork and correspondence. If you choose to use a claims firm, be aware that fees are capped at a maximum of 36% including VAT (banded by the amount recovered, broadly 15%–30% plus VAT), in line with FCA rules — so a firm will keep a share of anything you recover.
The process is explained step by step in our guide on how the claims process works.
How many signs do you need?
Even one of the signs above can be enough to look into a complaint — you do not need all five. None of them guarantees an outcome, and whether your case falls within the FCA scheme depends on the dates and details of your agreement.
Important things to keep in mind
- The 2025 Supreme Court ruling was largely in the lenders' favour; it did not confirm that all car finance was mis-sold.
- There is no automatic payout. Redress is decided through the FCA scheme on the facts of each agreement, and not everyone will receive money.
- The £830 figure is an FCA average per agreement, not a typical or guaranteed individual sum.
- The scheme is currently under legal challenge and the FCA has said payouts will be delayed, so we cannot give firm dates.
- Complaining is free, and you can do it yourself directly with your lender or via the Financial Ombudsman Service.
Take the next step
If you have spotted any of these signs in your own car finance experience, you can check whether your agreement may fall within the FCA scheme.
Submit your details through our free claim checker and we will look into whether you have grounds to complain. It takes a couple of minutes and there is no obligation. Remember, you can always complain to your lender directly for free. You can also learn more about our services, read about how our no win, no fee service works (fees capped at 36% including VAT if you use a firm), or speak with our team directly.
