How to claim car finance compensation
- Claim-Smart Contributor
- Jul 1
- 5 min read
You can claim car finance compensation by submitting a complaint directly to your lender or through a claims management company like Claim-Smart.
You may be eligible if you took out PCP or Hire Purchase finance on a car, van, motorbike or campervan between 6 April 2007 and 1 November 2024.
You can complain to your lender yourself, or you can speak to Claim-Smart if you would like extra support understanding the process.
If you think you may have been mis-sold car finance, you might be wondering how to claim compensation.
The good news is that you do not need to go to court, dig through old paperwork or understand the full details of the FCA’s redress scheme before making a complaint.
In most cases, the first step is just to contact your lender and ask them to confirm whether your finance agreement falls within the scheme.
If you’re looking for a bit of extra support throughout the claims process, Claim-Smart can help. We can explain whether you may be eligible, help you understand what
information is useful and guide you through the process from start to finish.
Who can claim car finance compensation?
You may be able to claim car finance compensation if you bought a vehicle using motor finance between 6 April 2007 and 1 November 2024.
This can include finance used for:
Cars
Vans
Motorbikes
Campervans
The most common types of finance covered are Personal Contract Purchase, known as PCP, and Hire Purchase, known as HP.
Personal Contract Hire, or PCH, is not included because it is a lease rather than a finance agreement.
The key thing that will decide if you are eligible is whether your lender paid commission to the dealer or broker, and whether that arrangement was properly explained to you at the time.
What types of commission are being looked at?
The FCA’s scheme is looking at certain commission arrangements, including discretionary commission arrangements, where a dealer or broker could influence the interest rate you paid and earn more commission as a result.
It can also include some high commission arrangements and contractual agreements between lenders and brokers.
You do not need to know exactly which arrangement applied to your agreement before making a complaint. Your lender should look into this when they review your case.
How do I find out who my lender was?
If you can’t remember who your car finance lender was, it doesn’t matter. At Claim-Smart, we can help find this information for you.
Some of the agreements being included in the scheme are nearly 20 years old. Because of this, many people do not remember who their lender was and no longer have the paperwork.
What information do I need to make a claim?
You do not always need the full finance agreement to start a complaint.
Useful information can include:
Your full name at the time
Your address at the time
The lender’s name
The approximate date you took out the agreement
The agreement number, if you have it
Do not worry if you do not have everything.
Many lenders can look for old agreements using basic details, especially if you can provide your name, previous address and vehicle information.
How do I submit a car finance compensation claim?
To submit a car finance compensation claim, you need to complain to your lender.
Many lenders now have dedicated online complaint forms for motor finance commission complaints.
In your complaint, you should explain that you took out motor finance and want the lender to check whether commission was paid to the dealer or broker and whether it was properly disclosed to you.
Once your complaint is submitted, your lender should acknowledge it and start reviewing your agreement.
If you would like help understanding your options and keeping track of your claim, Claim-Smart can support you through the process.
What happens after I submit my complaint?
After you submit your complaint, your lender should review your finance agreement.
They will look at whether your agreement falls within the FCA scheme and whether any relevant commission arrangement was involved.
At the moment, the process is taking longer than expected because parts of the FCA’s motor finance redress scheme have been suspended while legal challenges are heard.
This means lenders do not currently have to calculate compensation or make payments to customers who may be owed money under the scheme.
However, lenders are still expected to continue processing complaints and confirming which agreements are eligible.
When will I hear back from my lender?
The timing is currently unclear because of the legal challenges to the FCA scheme.
If your lender believes you are not owed compensation under the scheme, they still need to tell you.
If you are owed compensation, you may have to wait until the legal process has finished before your lender is able to tell you how much they owe you.
If the scheme is upheld and there are no further appeals, compensation payments are expected to start in 2027. Although this is frustrating, it does not necessarily mean there is anything wrong with your claim.
How much compensation could I receive?
The FCA has estimated that the average payout could be around £829 per agreement.
However, this is only an average. The amount you receive will depend on the details of your agreement, including the size of the loan, the interest rate, the commission arrangement and how long ago the agreement was taken out.
Some people may receive less than the average, while others may receive more.
It is also important to remember that the final compensation process could still change depending on the outcome of the legal challenges.
Should I claim now or wait?
If you think you are eligible, it is usually worth submitting your complaint now.
Even though compensation payments are delayed, making a complaint means your lender can start processing your agreement and preparing your case.
If the scheme is upheld in its current state, people who have already complained may move through the process faster than those who wait to be contacted later.
How to claim car finance compensation
So, how do you claim car finance compensation? The first step is to contact your lender and ask them to look into whether your car finance agreement included an undisclosed commission arrangement.
You can do this yourself for free using your lender’s complaint form. However, if you would like support understanding whether you may be eligible, finding the right information or managing the complaint, Claim-Smart can help guide you through the process.
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