Car finance claims: what to do if you bought a car on finance
Mae'r cyngor hwn yn berthnasol i Cymru. Gweler cyngor ar gyfer Gweler cyngor ar gyfer Lloegr, Gweler cyngor ar gyfer Gogledd Iwerddon, Gweler cyngor ar gyfer Yr Alban
Updated: 18 August 2025
You might be able to get compensation if both of the following apply:
you bought a car, van or motorbike on finance after April 2007
your finance lender paid the dealer a 'commission' you didn’t know about - this is a type of fee
On 1 August 2025, the Supreme Court decided that, in some cases, it was unlawful for the lender to pay the dealer a commission.
The Financial Conduct Authority (FCA) will set up a ‘redress scheme’. This scheme will decide both:
who can get compensation and how much they’ll get
how lenders will pay the compensation
If you think your lender paid a commission to your dealer, you should complain to your lender. This page has information about how you can do this, including how you can find out who your lender is.
We’ll keep updating this page as we find out more.
Beware of scams
Some scammers are pretending to be from car finance companies or the government to get your personal information.
If you think something might be a scam:
don’t give out any personal information or bank details
don’t use any contact details from the possible scam
You can check if something is a scam.
Check if your lender paid commission to your dealer
You can contact the lender to ask whether they paid a commission to your dealer.
Finding out who your lender is
You can check any paperwork for your car finance - this will tell you who your lender was.
If you were still making payments towards your car after 2019, you can also check your credit report. This should have a record of who lent the money. Find out how to check your credit report for free on MoneyHelper.
If you’re not sure whether a certain lender gave you finance, you can contact them to ask.
If your lender paid commission to your dealer
You might be able to get compensation.
The Financial Conduct Authority (FCA) is working on guidance to decide who can get compensation.
We don’t yet know how the FCA’s redress scheme will work. You should still complain to your lender about the commission payment. Your lender should then contact you with information when the redress scheme is announced.
Don’t start court action before the FCA announce the details of the redress scheme. If you’re covered by the redress scheme, it will probably not be worth starting court action.
The FCA has said most people will probably get up to £950 in compensation for each finance agreement.
If you’re still paying off your car finance
Keep making your payments. If you stop paying, it might harm your credit score, and you could lose your vehicle.
If you’re thinking of using a ‘claims management company’
Claims management companies (CMCs) are companies that offer to take your compensation case to court. If you get compensation, the CMC would take some of your compensation as their payment.
You don’t need to use a CMC to complain to your lender and get compensation. You’ll be able to do this yourself and get compensation just as quickly.
If you've already taken action
What you need to do now depends on the action you’ve already taken.
If you’ve complained to your lender
You don’t need to do anything right now.
When the FCA announces details about the redress scheme, your lender will contact you with information about how you can claim compensation.
If you’ve complained to the Financial Ombudsman Service (FOS)
You might have already complained to the FOS if you weren’t happy with the response from your lender.
If your case is still with the FOS, they might contact you for more details. They’re also waiting for information about the FCA redress scheme, so they will not make any decisions about claims until then.
If you’ve started court action
Your solicitor should contact you to talk about your next steps. You might have to wait some time for them to contact you because of the number of cases they’re dealing with. If they haven’t contacted you by October, you should contact them.
Your solicitor should tell you if it's worth continuing with your case.
If your solicitor advises you not to continue with your case, ask them if you’ll have to pay any costs.
If you don’t have a solicitor, it can be confusing to work out if it’s worth continuing with your case. You should get advice from a solicitor.
If you’ve signed up to a Claims Management Company
You should talk to the Claims Management Company (CMC) about your next steps. They should tell you if it’s worth continuing with your case.
If they advise you not to continue with your case, ask them if you’ll have to pay any costs.
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