What year did I need to buy a car to be eligible for mis-sold car finance?

To be eligible for compensation from mis-sold car finance, you need to have bought the car between 6th April 2007 and 28^th January 2021.

There are two types of finance that are covered by the scheme, Personal Contract Purchase (PCP) and Hire Purchase (HP), and it’s predicted that up to 14 million of these agreements will be able to claim for compensation. 

If eligible, customers will likely receive an average payout of £829 per agreement. So, if you took out more than one agreement during this window, you could receive more compensation.

From working out whether you’re eligible and managing the claims process through to any potential disputes, Claim-Smart Limited offers an expert team to guide you through from start to finish.

For more information and to start your claim today, get in touch today .

When and how was car finance mis-sold?

Between 2007 and 2021, car dealers who arranged car finance on a customer’s behalf were often implementing commission structures that hugely benefitted them, and exploited the customer.

Under the redress scheme, the FCA has categorised three ways that car finance was mis-sold:

1. Discretionary commission arrangements

When a car dealer sold a car, they could act as a broker between the customer and the finance company providing the agreement, allowing them to adjust commission payments in any way they wanted to.

This led to many dealers increasing interest rates to bump up their commission without having to tell the customer.

2. Contractual ties

This was where the customer was misinformed around the deal they were getting. Often, brokers worked exclusively with one lender. However, the broker would tell the customer that this was the best deal on the market, implying that market comparisons had been carried out when, in fact, they hadn’t.

3. Unfairly high commission

Although this kind of mis-sold finance will make up the lowest number of claims, where a customer's commission was deemed unfair they will be eligible for compensation. There are various levels:

• 39% or more of the total cost of credit and 10% or more of the loan

• 50% or more of the total cost of credit and 22.5% or more of the loan.

Many customers won’t have sight of what arrangement was involved in their agreement. This is where Claim-Smart Limited can provide a guiding hand to help you have all you need to confidently make your claim.

Who qualifies for mis-sold finance?

Customers who bought a car, van, motorbike, or campervan through either Personal Contract Purchase (PCP) or Hire Purchase (HP). 

The criteria for qualifying for mis-sold car finance includes: 

Type of vehicle

You must have purchased a car, van, motorbike or campervan. Caravan purchases are not eligible.

Date of purchase

Your finance agreement must have been taken out between 6 April 2007 and 28^th January 2021.

Finance plan

Only Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements qualify. Rental agreements are not covered.

Use of vehicle

The scheme covers vehicles purchased for personal use only, so if the finance was taken out by a business it isn’t covered.

Payment status

If you no longer own the car or it was repossessed, don’t worry. You can still qualify.

Number of agreements

You are eligible to claim for however many agreements you had within the time period, 1 or more.

What’s the average payout for mis-sold car finance?

The average payout is estimated to sit around £829 per agreement, although in more extreme cases where commission is found to be particularly excessive, it may be slightly higher.

It’s important to note that this is just the average figure. Each payout will vary according to the size of the commission, interest rate applied, and length of the agreement. 

For example, for a customer who purchased a vehicle of higher-value over a longer period of time, they could be owed considerably more.

The scheme requires lenders to create a baseline product that they can then measure the amount of compensation against, so each payout will be tailored according to this.

When will mis-sold car finance be paid?

Following the Financial Conduct Authority’s latest update, compensation for mis-sold car finance is expected to begin rolling out during 2026, although exact payment dates have not yet been confirmed.

The FCA has announced that the current pause on complaint handling will end in May 2026. After this point, lenders will need time to implement the new redress scheme and finalise how compensation will be calculated and distributed, meaning payments are unlikely to start immediately.

Under the proposed scheme, lenders will be required to proactively identify and compensate affected customers. However, this process may take time to reach all eligible drivers.

As a result, submitting a claim as early as possible could still help ensure your case is reviewed sooner, rather than waiting to be contacted later as part of the wider scheme rollout.

How can Claim-Smart Limited help me if I’ve been mis-sold car finance?

The FCA scheme to award compensation to those who have been mis-sold car finance is moving fast. 

As the scheme covers such a wide timeframe, and with payments predicted to start rolling out in the second half of 2026, now is the time to make your claim. 

While you don’t need a claims management company such as Claim-Smart Limited to successfully pursue a mis-sold car finance claim, the professional guidance and expertise we offer helps customers navigate the process confidently. 

From initial eligibility and compensation calculation, to supporting you through any disputes from lenders, having our specialist team in your corner can make all the difference.

And we’re in your corner all the way, operating a no-win, no-fee model. This means you only pay for our services if your claim is successful.

For more information, start your claim today.