What Is Hidden Commission in Car Finance?
Hidden commission is money a lender paid your dealer or broker for arranging your car finance without clearly telling you. Following the Supreme Court ruling of 1 August 2025 and the FCA's redress scheme confirmed in March 2026, certain undisclosed commission may now be addressed — but it is handled case by case through that scheme, not as an automatic payout, and you can complain directly to your lender for free.
When you buy a car on finance through a dealership, the dealer does not just sell you a vehicle. They also act as a credit broker, arranging the finance deal between you and the lender. For this service, the lender often pays the dealer a commission.
Commission itself is not unlawful. The concern is when it was not properly disclosed, or when the arrangement gave the dealer an incentive to put you on a more expensive deal. The clearest example is a Discretionary Commission Arrangement (DCA), where the dealer could raise the interest rate above the lender's base rate and earn more the higher they pushed it. The FCA banned DCAs on 28 January 2021. The 2026 redress scheme reaches wider than DCAs, as explained below.
The 2025 Supreme Court ruling and the FCA redress scheme
The Supreme Court ruling (1 August 2025). In Hopcraft, Johnson and Wrench ([2025] UKSC 33), the Supreme Court largely sided with the lenders. It held that dealers are generally not in a fiduciary relationship with customers, and it dismissed the broader "secret commission" and bribery arguments, overturning the more consumer-friendly Court of Appeal decision of October 2024. The Court upheld only the narrower part of Mr Johnson's case — an "unfair relationship" under section 140A of the Consumer Credit Act 1974. In short, there is no automatic, blanket payout: this was not a ruling that all car finance was mis-sold, and any redress flows through the FCA scheme rather than directly from the judgment.
The FCA redress scheme (confirmed 30 March 2026). The FCA confirmed an industry-wide, free redress scheme in Policy Statement PS26/3 (FCA, 2026). Key points:
- 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 different rules applying before and after 1 April 2014.
- It covers discretionary commission arrangements, high-commission arrangements and undisclosed commission ties — not DCAs alone.
- The FCA estimates around 37% of agreements could be eligible — roughly 12.1 million (FCA, 2026).
- Once you accept an offer, the lender must pay you within one month.
Important status (as of June 2026): the scheme is under legal challenge. A challenge was filed in early May 2026, and an Upper Tribunal hearing is not expected before October 2026. The FCA has said this will delay payouts, and the overall timetable is uncertain. For that reason, no one can promise that payments are happening now or give a firm deadline.
Which commission is now in scope?
The redress scheme looks at more than just DCAs. The table below summarises the main commission types it considers.
| Type | What it is | Can it lead to redress |
|---|---|---|
| Discretionary commission arrangement (DCA) | The dealer/broker could vary your interest rate, earning more commission the higher the rate. Banned by the FCA on 28 January 2021. | Yes — a core focus of the scheme where the agreement falls within the eligibility window and other criteria are met. |
| High commission | Commission that was a large share of the cost of credit, even without a DCA. | Potentially — the FCA's rules consider high-commission arrangements, assessed case by case. |
| Undisclosed tie | The dealer/broker had a commercial tie to a lender that was not made clear to you. | Potentially — undisclosed ties are within scope where the agreement qualifies. |
Eligibility is assessed against the scheme's criteria. Some agreements are not covered, including personal contract hire (PCH) leases, 0% finance deals, agreements with very small commission, deals in the lowest 5% of APRs, and cases already decided by the Financial Ombudsman Service or a court. Agreements that have been paid off or settled, and those belonging to customers who have since died, can still be eligible (FCA, 2026).
How much could redress be worth?
The FCA's figures in PS26/3 put the average redress at about £830 per agreement (£829) for those who qualify. This is an FCA average across the scheme, not a typical or guaranteed individual amount. It varies widely: around one in three eligible agreements is expected to be capped, and some people will receive nothing. Across the industry, the FCA estimates roughly £7.5 billion in redress (about £9.1 billion including firms' costs) (FCA, 2026).
In other words, no one can promise you a specific sum. Whether you receive anything, and how much, depends on the details of your agreement and the scheme's assessment.
Who may be eligible?
You may fall within the scheme if you took out qualifying car, van, motorbike or campervan HP or PCP finance between 6 April 2007 and 1 November 2024 and commission was paid. Note that the relevant window is the 2007–2024 period above, not the 28 January 2024 date sometimes quoted — that earlier date related to the FCA's temporary pause on complaint handling, not eligibility.
For the full picture on the FCA's actions, read our guide to the FCA car finance review.
How to check if you were affected
There are several ways to find out whether your finance agreement may fall within the scheme.
Check your finance agreement
Look at your original paperwork. Search for any mention of commission, broker fees, or intermediary payments. Note the lender, the dates, the type of agreement (HP or PCP), the interest rate and the term.
Ask the lender directly — for free
You can complain directly to your lender at no cost, and you do not need a claims management company to do this. Under the Consumer Credit Act you can also ask the lender to confirm whether commission was paid and, if so, how it was structured.
Use our free claim check
If you would rather not do this yourself, you can submit your details through our claim form and we will look into your agreement. Using a firm is optional — complaining direct is always free.
What happens next
If you complain, the lender reviews your agreement against the scheme and the law. The process generally involves:
- Gathering your information — vehicle details, the finance company, dates and any paperwork. See our guide on required documents.
- Submitting a complaint — either directly to the lender for free, or through a claims company.
- Lender assessment — the lender considers whether redress is due under the FCA scheme.
- Outcome — if redress is offered and you accept, the lender must pay within one month. Remember the timetable is currently affected by the legal challenge.
If the lender rejects your complaint, you can escalate it to the Financial Ombudsman Service (FOS) for an independent review.
A note on fees if you use a claims company
You can always complain to your lender yourself for free, and there is no guarantee of any payout. If you choose to use a claims management company, fees are capped by FCA rules and are banded according to how much is recovered, up to a maximum of 36% including VAT (broadly 15%–30% plus VAT). Always check the fees before you sign anything.
Common questions about hidden commission
Does it matter if I have already paid off the finance? No. Agreements that have been paid off or settled can still be eligible, provided they meet the scheme's criteria and time period.
What if I had several finance agreements? Each agreement is assessed on its own. The FCA's average figure is per agreement, not per person.
Will this affect my credit score? No. Complaining about your car finance has no impact on your credit rating.
What if the dealer has closed down? Your complaint is dealt with through the lender, so it does not matter if the dealership no longer exists.
In summary
The 2025 Supreme Court ruling did not mean all car finance was mis-sold, and it did not create automatic payouts. Instead, the FCA's redress scheme (PS26/3, 2026) provides a free, industry-wide route to consider certain commission arrangements on car, van, motorbike and campervan HP and PCP agreements from 6 April 2007 to 1 November 2024. The scheme is currently under legal challenge, so timescales are uncertain and payments are not guaranteed.
You can complain to your lender directly for free and do not need a claims management company. If you would prefer help, our service is optional and any firm's fees are capped at 36% including VAT.
Check your eligibility for a free PCP claim now. It takes just a couple of minutes and there is no obligation. Our service is no win, no fee, and you can always complain to your lender yourself at no cost. You can also contact our team directly if you would prefer to speak to someone.
