Motoring.Today

Motor finance mis-selling, made simple: the car finance commission scandal explained

Reviewed by the Motoring Today Editorial team · methodology in our editorial standards.

Published / last reviewed: 10 July 2026 · Information correct as at 10 July 2026

In one line

Between 2007 and 2024, millions of UK car buyers were charged commission on their finance they were never clearly told about. Courts and the regulator have been deciding what that means — and whether you're owed money back. Complaining is free, and you don't need a claims company.

What "mis-selling" means (simple version)

When you bought a car on finance (PCP or HP), the dealer often arranged the loan and was paid commission by the lender. In many cases that commission — and how it worked — wasn't clearly disclosed. In some arrangements the dealer could even set your interest rate higher to earn more commission. That hidden incentive could have made your finance more expensive without your informed consent.

What is a discretionary commission arrangement (DCA)?

It let the dealer/broker choose your interest rate within a band — and the higher the rate, the more commission they earned. The FCA banned DCAs in January 2021, but earlier agreements are the core of the concern.

Timeline (as at 10 July 2026)

  • 25 Oct 2024 — Court of Appeal: dealers couldn't lawfully take commission without informed consent. Sweeping, pro-consumer.
  • 1 Aug 2025 — Supreme Court: narrowed that ruling. Rejected the broad "bribery"/fiduciary arguments, but held an "unfair relationship" under the Consumer Credit Act can exist where commission was hidden — as in Johnson (commission 55% of the credit charge, undisclosed lender tie, misleading paperwork).
  • 30 Mar 2026 — FCA confirms redress scheme (PS26/3): ~12.1 million agreements, ~£8.2bn total estimated (~£700 average — an estimate).
  • 2 Jul 2026 — scheme partially paused: the Upper Tribunal suspended key parts after a legal challenge. Firms don't have to calculate or pay redress yet — but must still tell people who are NOT owed.
  • Next: hearing 14–18 December 2026 or 16–26 February 2027. If upheld, payments could start 2027; if overturned, redress could slip to 2028 or later.

Am I affected?

Possibly, if ALL of these are true: car finance (PCP or HP) taken out roughly 2007–2024; arranged by a dealer or broker; and the commission wasn't clearly explained to you. Cash purchases, most personal loans not arranged by the dealer, and business-only agreements are generally outside it. Check the FCA's own eligibility guidance rather than assuming.

What should I do? (all free)

  1. Complain to your lender or broker first — say you believe commission wasn't properly disclosed and want it reviewed. Free.
  2. If you're unhappy with their answer (or they don't resolve it), escalate to the Financial Ombudsman Service — also free.
  3. Use the official guidance — the FCA's car finance complaints page and MoneyHelper explain your rights.
  4. Keep your paperwork and watch for scheme communications from your lender.

Do I need a claims company? No.

They often take 30% or more of any payout for something you can do yourself for free. If you've already signed with a claims firm and you're unhappy, you can complain about them for free too.

We can't handle a claim for you — Motoring.Today is a credit broker and a news/education site, not a claims-management company. This page points you to the free official routes on purpose.

Latest developments

This is a developing story. We keep a neutral, dated timeline of official developments — the FCA scheme, court rulings and Financial Ombudsman decisions.

Read the latest updates →

Frequently asked questions

Is the car finance redress scheme delayed?
Partly. On 2 July 2026 the Upper Tribunal suspended key parts; firms don't pay redress yet; a hearing is set for December 2026 or February 2027. If the scheme survives, payments could begin in 2027.
How much could I get?
The FCA's average estimate is around £700 per agreement, but amounts vary a lot and nothing is guaranteed — especially while the scheme is paused. Treat any figure as an estimate.
Do I have to pay to claim?
No. Complaining to your lender and escalating to the Financial Ombudsman are both free. You do not need a paid claims company.
Which cars/finance count?
Typically PCP or Hire Purchase arranged through a dealer between about 2007 and 2024 where commission wasn't disclosed. Check the FCA's eligibility guidance for your situation.
What's a discretionary commission arrangement?
An arrangement where the dealer could set your interest rate and earned more commission the higher it was. Banned by the FCA in January 2021.

Related reading

Official sources

Motoring.Today is a trading style of Motor Genius Group Ltd (FCA ref 960504), an Appointed Representative of The Compliance Guys Ltd (FCA FRN 941360). We are a credit broker, not a lender, and not a claims-management company. This is general information, not financial or legal advice.