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Car Finance Claims

What Are Car Finance Claims?

Think back to when you bought your car. The salesman was friendly, helpful—made the whole process feel easy. When it came to finance, he said "let me see what I can do for you." Ten minutes later, he came back with an offer: approved, affordable monthly payments, all sorted. You signed, drove off happy, and thought nothing more of it.

Here's what you didn't know: that dealer was earning commission from your finance agreement. Not just a small referral fee—we're talking hundreds, sometimes thousands of pounds. And here's the kicker: the higher your interest rate, the more they made. You were paying extra every month for years, and nobody told you.

This is what car finance claims are about. Between 2007 and 2024, millions of UK consumers were caught up in hidden commission arrangements that financial regulators have now called "unfair." If you bought a car on finance during this period, you could be entitled to compensation.

The Hidden Commission Scandal Explained

Let's walk through what actually happened, because understanding this helps you realize why your claim is legitimate—not some "too good to be true" scheme.

The setup: When you wanted to buy a car, the dealer acted as a "credit broker." They had relationships with finance companies (Close Brothers, Black Horse, Santander, and dozens more). These lenders paid dealers commission for bringing them business.

The problem: Instead of a flat referral fee, lenders used something called Discretionary Commission Arrangements (DCAs). Here's how it worked:

The lender would give the dealer a range of interest rates—say, 7% to 12%. The dealer could choose ANY rate within that range. If they chose 7%, they'd earn basic commission. If they chose 12%, they'd earn significantly more—sometimes double or triple the amount.

Guess which rate they usually chose?

What makes this mis-selling: The Financial Conduct Authority found that these arrangements created an unfair conflict of interest. Dealers should have either:

• Told you explicitly about the commission structure
• Given you the opportunity to negotiate
• Recommended the best rate for YOUR circumstances, not theirs

In most cases, none of these happened.

Why This Matters to You

Maybe you're thinking "okay, but I paid off my finance years ago" or "the monthly payments seemed fine at the time." Here's why you should still care:

You overpaid for years. If your dealer inflated your rate by just 2%, on an £18,000 loan over 4 years, you paid roughly £800 more than necessary. That's £800 that went into the dealer's pocket as commission—money you worked hard to earn, money you could've saved or spent on something else.

It wasn't disclosed to you. This is the legal crux of the issue. The Supreme Court examined these arrangements in 2024 and found they constituted "unfair relationships" under the Consumer Credit Act 1974. You deserved to know how the dealer was being paid and how that affected your interest rate.

You can claim it back. The FCA has launched a redress scheme (starting May 2026) to compensate affected consumers. But you don't have to wait—you can make a claim now.

Who Can Claim Car Finance Compensation?

Let's figure out if you're eligible. Don't worry if you can't remember all the details—we'll walk through this step by step.

The Basic Requirements

You're likely eligible to claim if your situation matches these circumstances:

You had car finance between 2007 and 2024 - This is the period when DCAs were legal (though unethical). The FCA banned them in January 2021, but many agreements signed before then ran into 2024. Even if you've long since paid off the finance or returned the car, you can still claim.

A dealer or broker arranged your finance - This is key. If you walked into a car dealership and they "sorted the finance" for you, they were acting as a credit broker. Even if you bought from a car supermarket or online retailer, if they arranged the finance, you're potentially eligible.

You weren't told about commission arrangements - Think carefully: did the dealer sit you down and explain "I can set your rate between 7% and 12%, and I'll earn more commission if I choose a higher rate"? Almost certainly not. At most, there might have been vague language buried in paperwork about "receiving fees for arranging finance." That's not adequate disclosure.

The finance was for a car, van, or motorcycle - This applies to personal contract purchase (PCP), hire purchase (HP), conditional sale, and personal loans arranged by dealers. It doesn't matter if it was new or used, expensive or affordable—if a dealer arranged the finance, you could have a claim.

Real Scenarios: Who We've Helped

Let me share some anonymized examples to help you see if your situation fits:

Sarah's 2017 PCP claim: Sarah bought a used Audi on PCP through a dealership. The dealer arranged Close Brothers finance at 10.9% APR. Sarah had good credit—she should've qualified for around 7-8% if she'd shopped around. The dealer chose 10.9% to maximize commission. Result: £1,340 compensation awarded.

David's multiple HP agreements: David bought three cars between 2012 and 2019, all financed through dealerships with different lenders. He never knew dealers earned more by inflating rates. Result: Claims on all three agreements, total compensation over £2,400.

Emma's "affordable" PCP: Emma's monthly payments seemed reasonable at £295/month, so she never questioned the rate. Turns out, at a fairer rate, she would've paid £265/month—£30 less every month for 48 months. Result: £890 compensation.

These are real cases handled by our solicitor partners. Notice a pattern? None of these people knew they'd been overcharged until they checked their eligibility.

What If You're Not Sure?

Maybe you're thinking "I don't remember all the details" or "I'm not sure if this applies to me." That's completely normal. Here's what to do:

Check anyway. Our eligibility assessment takes 2 minutes and costs nothing. We'll ask simple questions: When did you get the car? Who arranged the finance? Do you remember the lender's name? From those answers, we can tell you if you're likely eligible.

You don't need documents yet. We're not asking you to dig through old files at this stage. If you're eligible, your solicitor can request copies of your finance agreement from the lender—they're legally required to keep these records.

There's no downside to checking. If you're not eligible, we'll tell you straight away. If you are eligible, you can decide whether to proceed. No pressure, no obligation, no cost.

Common Types of Car Finance (And Why They All Matter)

You might have heard terms like PCP, HP, or conditional sale thrown around. Let's break down what these actually mean—and why it doesn't really matter which type you had for claims purposes.

Personal Contract Purchase (PCP)

This was the most popular type of car finance in the UK during the DCA period. Here's how it worked:

Lower monthly payments: You put down a deposit (maybe 10%), then made monthly payments for 2-4 years. But you weren't paying off the car's full value—you were paying off the depreciation.

The balloon payment: At the end, you had three choices: return the car and walk away, trade it in for another PCP deal, or pay a big final "balloon payment" to own it outright.

Why dealers loved PCP: Those lower monthly payments made expensive cars seem affordable. A £35,000 BMW that would've cost £700/month on a traditional loan suddenly looked manageable at £395/month on PCP. And when customers came back at the end to trade it in for another car? The dealer earned commission all over again.

Hire Purchase (HP)

HP was more straightforward than PCP:

Fixed monthly payments: You paid the same amount each month for the agreement term (usually 3-5 years).

You own it at the end: Once you made the final payment, the car was yours. No balloon payment, no choice to make—simple ownership transfer.

Interest was still negotiable: Even though HP seemed more transparent, dealers still had discretion over your interest rate under DCAs. They could inflate it to earn higher commission, and most consumers never knew.

Conditional Sale

Similar to HP but with a subtle legal difference:

Pay over time, own at the end: Like HP, you made monthly payments and owned the car after the final payment.

The legal distinction: Technically, ownership transferred automatically after the last payment (unlike HP where you needed to pay a small "option to purchase" fee).

Commission worked the same way: Dealers arranged conditional sale agreements with lenders and earned commission based on the rate they chose for you.

Personal Loans (Arranged by Dealers)

Sometimes dealers arranged personal loans instead of PCP or HP:

Unsecured finance: Unlike PCP/HP where the lender had security over the car, personal loans were unsecured.

Dealer still earned commission: If the dealer arranged the loan with a finance company (not you applying directly to your bank), they earned commission—and DCAs applied.

Less common but still eligible: Fewer people had dealer-arranged personal loans, but if you did, you can claim.

Major Lenders Involved in the Scandal

The hidden commission issue wasn't limited to one or two "bad apple" lenders. This was industry-wide. Here are some of the major finance companies involved:

Close Brothers Motor Finance: One of the UK's largest motor finance lenders. They were specifically examined in the Supreme Court case that ruled on DCAs. If you had Close Brothers finance arranged by a dealer, you're highly likely eligible to claim.

Black Horse (Lloyds Banking Group): Black Horse provided finance through thousands of dealerships across the UK. They used DCAs extensively and are one of the most common lenders in claims we process.

Santander Consumer Finance: Major player in car finance. Their dealer network was vast, and DCAs were standard practice.

FirstRand Bank (MotoNovo): MotoNovo-branded finance was common in dealerships. They operated under DCA arrangements during the relevant period.

Secure Trust Bank (V12 Finance): Provided finance through dealer networks with commission structures that are now being scrutinized.

Other lenders: Startline Motor Finance, Advantage Finance, Moneybarn, Blue Motor Finance, and dozens more all used DCAs. If you had finance from ANY lender arranged by a dealer between 2007-2024, it's worth checking your eligibility.

How Much Could You Claim?

Let's address the question everyone wants answered: how much compensation might you receive?

The Honest Answer

We can't tell you an exact amount upfront—and anyone who promises a specific figure before reviewing your case is misleading you. Compensation depends on YOUR specific circumstances.

However, we can explain how it's calculated so you understand what affects your potential compensation:

The commission charged: Higher commission = higher compensation. If your dealer earned £2,000 commission by inflating your rate by 4%, your compensation will be significantly more than someone whose dealer earned £500 with a 1% inflation.

Your finance amount and term: Larger loans over longer terms mean more total interest paid. A £30,000 PCP over 4 years with inflated rates has a bigger financial impact than a £10,000 HP over 2 years.

The interest rate difference: This is about what you paid vs. what you should've paid. If you had a 10% rate but deserved a 6% rate based on your credit profile, that 4% difference compounds to significant overpayment.

Whether you settled early: If you paid off your finance early, you paid less total interest, which affects compensation calculations.

Industry Data (Not MCC-Specific)

The FCA estimates:

Important: This is an INDUSTRY AVERAGE across all motor finance claims. Your amount could be:

• Higher: If you had a large loan, long term, or significant rate inflation
• Lower: If your finance was smaller or the commission impact was minimal
• Much higher: If you had multiple eligible agreements

What About Multiple Agreements?

Here's where claims can really add up: if you had multiple finance agreements during 2007-2024, you can potentially claim on each one.

Many people change cars every few years. If you had three PCP agreements between 2012 and 2020, all arranged by dealers using different lenders, you could have three separate claims. At an average of £700 per claim, that's £2,100 in total compensation—well worth pursuing.

What Makes Our Service Different?

You might be wondering: there are lots of companies offering to help with car finance claims. What makes us different?

We're Transparent About What We Do (And Don't Do)

What we ARE:

• A claims management referral service
• A connection point between you and specialist solicitors
• Free for you to use (we're paid by the solicitor, not you)
• FCA authorized for claims management referrals (FRN: 1013195)

What we're NOT:

• Solicitors ourselves
• The company handling your actual claim
• Charging you any fees

Our Solicitor Network

We work exclusively with FCA-regulated specialist solicitors who focus on car finance claims. Why does this matter?

They know the law: Car finance claims involve the Consumer Credit Act 1974, FCA regulations, and Supreme Court precedent. General practice solicitors might not have this expertise—our partners do.

They have proven track records: We only work with solicitors who've successfully handled hundreds (often thousands) of car finance claims. They know what evidence to gather, how to present cases, and how to negotiate with lenders.

They work on no win, no fee: Every solicitor we introduce you to operates on a no win, no fee basis. If your claim fails, you pay nothing.

The Process Is Actually Simple

We've removed the intimidation factor:

1. 2-minute eligibility check - Basic questions, no documents needed
2. We match you with a solicitor - Within 24-48 hours if you're eligible
3. You decide whether to proceed - No pressure, 14-day cooling-off period
4. Solicitor handles everything - You just wait for updates
5. Compensation paid directly to you - Clear breakdown of fees

No complexity, no legal jargon in your face, no surprise charges.

What Happens Next If You Check Eligibility?

Let's walk through exactly what happens if you decide to check your eligibility:

Step 1: Fill Out the Form (2 Minutes)

You'll answer basic questions:

• When did you get your car on finance?
• Do you remember the lender name?
• Did a dealer or broker arrange it?
• Do you still have any documentation?

You don't need perfect answers. "Around 2016" is fine. "I think it was Close Brothers" works. "The dealer arranged it but I don't remember details" is totally normal.

Step 2: We Review (Within 24-48 Hours)

Our team looks at your responses and checks:

• Whether your timeframe matches the DCA period
• If the lender typically used commission arrangements
• Whether your situation matches eligibility criteria
• If similar claims have been successful

If you're not eligible: We'll email you within 48 hours explaining why. No hard sell, no pressure to proceed anyway—just an honest answer.

If you are eligible: We'll contact you to introduce you to one of our solicitor partners.

Step 3: Meet Your Solicitor (Your Choice to Proceed)

The solicitor will:

• Call or email you within a few days
• Explain their assessment of your case
• Answer any questions you have
• Send you their Client Care Letter and Fee Agreement if you want to proceed

This is where you decide. No obligation to proceed. No pressure. Take your time, read the agreement, ask questions.

Step 4: Solicitor Handles Your Claim

If you sign their agreement:

• They request your finance documents from the lender
• They build your case with supporting evidence
• They submit a formal claim letter
• They negotiate on your behalf
• They keep you updated throughout

Your involvement: Minimal. You might need to sign authority letters or confirm some details, but they do the heavy lifting.

Step 5: Compensation Paid to You

When your claim succeeds:

• Lender pays compensation to solicitor's client account
• Solicitor deducts their success fee (typically 30%) + VAT
• Solicitor sends you a clear breakdown
• Solicitor transfers your net compensation to your bank account

Timeline: Most claims take 3-6 months for straightforward cases.

Frequently Asked Questions

Do I need my old finance documents?

No. If you're eligible, your solicitor can request copies from the lender. Lenders must keep these records for years.

What if I've already paid off the finance?

That's fine! You can still claim. The fact that the agreement has ended doesn't affect your eligibility.

Can I claim if I returned the car early?

Yes. Whether you completed the agreement, returned the car, or paid it off early, you can still claim if commission wasn't properly disclosed.

What if I'm not sure which lender I had?

Not a problem. We can often identify the lender based on the dealership and timeframe. Your solicitor can also check your credit file or contact the dealer.

Will this affect my credit score?

No. Making a claim doesn't impact your credit score. You're claiming compensation for past mis-selling, not disputing a debt.

How long do I have to make a claim?

There are limitation periods (usually 6 years from when you discovered or should've discovered the issue). Don't delay—check your eligibility now to protect your right to claim.

Can I make a claim if I used a claims management company before?

Possibly. If your previous claim was rejected or you received a settlement you believe was too low, it may be worth having a solicitor review it again.

Is this really free to check?

Yes. Our eligibility check costs you nothing and commits you to nothing. If you proceed with a solicitor, their fees are clearly explained upfront and only charged if you win.

Ready to Check Your Eligibility?

You've read how this works, what makes it legitimate, and what you could potentially claim. Now it's decision time.

If you had car finance between 2007 and 2024, arranged by a dealer, the likelihood is that you're eligible to claim. The question is: will you check?

Think about it: 2 minutes of your time to find out if you're owed hundreds (potentially thousands) of pounds. If you're not eligible, you've lost nothing. If you are eligible, you could receive compensation for money you overpaid years ago.

The choice is yours. But don't wait too long—limitation periods exist, and the sooner you claim, the sooner you could receive compensation.