What can I do if my car finance claim is rejected?
A rejection from your lender around a car finance claim is not always the final word. You can ask them to look at it again, or take your complaint to the Financial Ombudsman Service for free.
What happens next depends on whether your lender rejected your complaint outright, or told you that you're not owed compensation under the FCA's redress scheme.
You don't need a claims management company to challenge a rejection, but Claim-Smart can help you understand the reason you were given and what to do next.
Getting a letter saying you're not owed anything for your car finance claim can feel like the end of the road. It isn't necessarily.
A rejection is your lender's opinion of your complaint, based on the information they've looked at. It isn't a final legal decision, and there are still routes open to you if you think they've got it wrong.
Here we explain what a rejection actually means, why it might have happened, and what your options are for challenging it, including how the Financial Ombudsman Service fits in.
What does it mean if my car finance claim has been rejected?
It means your lender has looked at your complaint and decided, based on what they currently know, that you're not owed compensation.
This is different from checking the status of your claim, where you're just waiting to hear back. A rejection means a decision has been made, even if you don't agree with it.
This might be a rejection of a complaint you made directly, or it could be a "not owed compensation" decision made as part of the FCA's redress scheme. Either way, it's your lender's view of your case rather than an independent, final ruling.
Don't worry if this feels confusing. Lenders don't always explain clearly which type of decision you've received, so it's worth reading the letter carefully or getting help working out what it says.
Why might my car finance claim have been rejected?
There are several possible reasons, and not all of them mean you have no case at all.
Your lender might say:
They can't find a commission arrangement on your agreement
The commission was properly disclosed to you when you took out the finance
Your agreement falls outside the FCA's scheme, for example because it was a lease (PCH) rather than PCP or HP, or because it was for business use
The commission amount was too small to count as unfair under the scheme's rules
Your complaint was made too late
None of these reasons are necessarily the end of the story. Whether your agreement qualifies can depend on details that aren't always obvious from a rejection letter, so it's worth checking how commission arrangements are assessed before assuming a rejection is the final word.
Can I challenge my lender's decision?
Yes, you can ask your lender to review its decision if you think it's got something wrong.
This might be worth doing if:
You believe they've missed information about your agreement
The dates or details in the letter don't match your records
You have evidence they haven't seen, such as old paperwork or bank statements
Asking your lender to look again doesn't guarantee a different outcome, but it's a good first step, especially if something in the letter looks like an error rather than an accurate decision.
If you’re still unhappy after that, or you'd rather not go back to the lender directly, you can take your complaint further.
What is the Financial Ombudsman Service?
The Financial Ombudsman Service, or FOS, is a free and independent body that settles complaints between consumers and financial businesses.
Unlike your lender, the Ombudsman isn't just checking its own earlier decision. It forms its own view of what's fair, and its decisions are binding if it rules in your favour.
Taking your complaint to the Ombudsman costs nothing. If you want to, you can find out more and start a complaint on the Financial Ombudsman Service website.
How long do I have to take a rejected car finance claim to the Ombudsman?
This depends on the type of letter you've received, so it's worth checking carefully rather than assuming a fixed deadline.
If you were sent an ordinary final response letter rejecting your complaint, the usual rule is that you have 6 months from the date of that letter to refer it to the Ombudsman.
If your letter is a "not owed compensation" decision made under the FCA's redress scheme, the deadline should be stated in that specific letter rather than following the standard 6-month rule.
If you're not sure which applies to you, or you can't find a clear deadline on your letter, Claim-Smart can help you work out where you stand.
Does the suspended FCA scheme change any of this?
Not for everyone. Parts of the FCA's redress scheme are currently suspended while legal challenges are heard, which means lenders don't currently have to calculate or pay out compensation under the scheme.
However, lenders can still tell some customers that they're not owed compensation under the parts of the scheme that haven't been suspended, or because their agreement falls outside the scheme altogether.
If your agreement began on or after 1 April 2014 and you complained by 30 June 2026, your lender should tell you by 18 November 2026 if you're not owed anything. For agreements that began before 1 April 2014, where you complained by 31 August 2026, the date is 18 January 2027.
This is why rejections are still happening even though the wider scheme is on hold. The regulatory position has changed a few times over the past year, so it's worth checking the latest guidance if you're unsure which part of the scheme applies to you.
Do I need a claims management company to challenge a rejection?
No, you don't need to use a claims management company to challenge a rejected car finance claim.
You can ask your lender to review its decision yourself, and you can refer your complaint to the Financial Ombudsman Service for free, without paying anyone else to do it for you.
Some people choose to get help anyway, for example if they:
Aren't sure why their claim was rejected
Don't know which deadline applies to their letter
Would rather someone else managed the correspondence
Want a second opinion before deciding whether to challenge the decision
If that sounds like you, Claim-Smart can help you understand your rejection letter and decide on next steps.
So, what can I do if my car finance claim is rejected?
Start by reading the letter carefully to work out whether it's a regular rejection or a "not owed compensation" decision under the FCA's scheme, since this affects your deadline.
If you think your lender has made a mistake, you can ask them to review their decision. If you are still unhappy, or would rather go straight to an independent review, you can refer your complaint to the Financial Ombudsman Service for free.
You don't need to use a claims management company to do either of these things. If you'd like help understanding your rejection letter or deciding what to do next, Claim-Smart can help. Get in touch to find out more.
*Please see our terms and conditions for our fee structure and cancellation terms.
Comments