Are you owed money?
You might be. But lenders don't have to pay out on a car finance claim yet. The Financial Conduct Authority (FCA) regulates car finance lenders. It has set up a compensation scheme for people who weren't told about certain commission arrangements on their deal.
The scheme covers finance used to buy a car, motorbike or van between 6 April 2007 and 1 November 2024. The FCA estimates that around 12.1 million agreements are eligible.
Parts of the scheme are suspended while a tribunal hears a legal challenge. Until that ends, lenders don't have to work out or pay compensation under it. So even if your agreement qualifies, nothing is due yet.
You can still act now, and it costs nothing. The FCA's own page says: "You don't need to use a CMC or a law firm to take part in our scheme." A CMC is a claims management company.
This page explains the rules. It isn't legal or financial advice. It's part of our wider guide to running a used car.
Does this apply to your agreement?
Start with the date. Your agreement must have begun between 6 April 2007 and 1 November 2024.
Then check the type of finance. The FCA says the scheme includes hire purchase (HP) and personal contract purchase (PCP). Its policy statement, PS26/3, names conditional sale agreements too.
Leasing is out, because the scheme doesn't cover personal contract hire. Our guide to HP and PCP explains how those agreements work.
Next comes the commission itself. The lender paid the broker, usually the dealer, for arranging your loan. The scheme applies if you weren't told about one of three arrangements:
- A discretionary commission arrangement. The broker could adjust your interest rate to earn more commission.
- A high commission arrangement. The commission was at least 39% of the total cost of credit and 10% of the loan.
- A contractual tie. The broker used only one lender, or gave one lender first refusal on your loan. A tie doesn't count if there were visible links between the lender, the manufacturer and the franchised dealer, such as a shared name.
You don't have to work out which one applied, because the scheme makes lenders gather that information themselves.
Some agreements are treated as fair. That covers commission of £120 or less on agreements starting before 1 April 2014, and £150 or less from that date. It also covers deals where you paid no interest.
The scheme has exclusions as well. It leaves out agreements over £25,000 that were for business purposes, and agreements over £25,000 made before 6 April 2008. It leaves out very large loans too, which the FCA calls high value loans.
You're out if you've already accepted compensation. The same goes if a court or the Financial Ombudsman Service has already considered your complaint.
Not sure whether a car you've bought still has finance on it? That's a separate question, and our outstanding finance guide covers it.
Why is the scheme paused?
The FCA confirmed the scheme on 30 March 2026. It's really two schemes. One covers agreements from 6 April 2007 to 31 March 2014, and the other covers 1 April 2014 to 1 November 2024.
Four parties then challenged it at the Upper Tribunal. Three are lenders: Volkswagen Financial Services, Mercedes Benz Financial Services and Crédit Agricole Auto Finance. The fourth is Consumer Voice, represented by Courmacs Legal.
The Tribunal released an order suspending parts of the scheme on 1 July 2026, and the FCA announced it the next day. The terms were agreed between the FCA and the four challengers.
The order pauses the paying-out part. Lenders aren't required to calculate or pay compensation while the challenge runs. They also aren't required to send letters about compensation owed under the scheme.
That includes a date you may have seen: 30 September 2026. Under the original timetable, lenders had three months to tell complainants whether they were owed money, and how much. For agreements from 1 April 2014, that clock started on 30 June 2026. The suspension covers that step, so the date isn't a live deadline.
Not everything stopped. Lenders must still identify complaints and gather the commission data, and they must also tell you if you've complained and you're not owed anything. The FCA gives two dates for that:
- 18 November 2026, if your agreement began on or after 1 April 2014 and you complained by 30 June 2026.
- 18 January 2027, if your agreement began before 1 April 2014 and you complained by 31 August 2026.
Complain later than that, and the lender should tell you within 5 months.
Silence isn't a yes. The dates don't apply if your lender thinks your complaint is out of time. They also don't apply to some complaints about contractual ties. The FCA says that not hearing by those dates doesn't necessarily mean you're owed compensation.
What can you do while it's paused?
Complain to your lender. It's free, and you don't have to wait for the tribunal. The FCA's car finance claims page has a searchable list of lenders, with contact details, a template letter and links to lenders' own complaint forms.
Can't remember who the lender was? The FCA suggests checking old bank statements or asking the dealer, and your credit file may list the lender too.
Already complained? Then sit tight. The FCA's July 2026 factsheet for complainants says you "don't need to do anything further for now".
Two different pauses get mixed up here. The first was extra time the FCA gave lenders to answer commission complaints. The FCA says that pause "expired on 31 May". The second is the scheme suspension, which began a month later and is still running.
The end of the first pause didn't open every door. The Financial Ombudsman Service is the free body that settles disputes between customers and finance firms. It says it isn't taking on complaints that are part of the scheme. For those, it wants your lender's decision on compensation first, unless the lender's deadline has passed.
The Ombudsman page was last updated on 21 May 2026, before the suspension. For what the legal challenge means, it points readers to the FCA.
So when can you go to the Ombudsman? One route opens if your lender says you're owed nothing, or that your case falls outside the scheme. If you think that's wrong, the FCA says to ask the lender to review it. If you're still unhappy, you can refer the complaint to the Ombudsman.
The other route is for complaints entirely outside the scheme, such as high value loans. The FCA says lenders should handle those in the usual way. If you're unhappy with the answer, the Ombudsman can look at it.
Still paying for the car and thinking of selling it? That's a separate job, and our guide to selling a car with outstanding finance covers the steps.
Do you need a claims company?
No. You can complain yourself for free, and the FCA says so plainly. Whether you use a firm anyway is your call, but know the cost before you sign.
The FCA warns you could pay "up to 36% in fees, including VAT" out of any compensation. It caps what the claims companies it regulates can charge, under rule CMCOB 5.2.9R in its Handbook. The cap is the lower of a percentage and a fixed sum, and both exclude VAT:
| Compensation awarded | Maximum percentage | Maximum charge |
|---|---|---|
| £1 to £1,499 | 30% | £420 |
| £1,500 to £9,999 | 28% | £2,500 |
| £10,000 to £24,999 | 25% | £5,000 |
| £25,000 to £49,999 | 20% | £7,500 |
| £50,000 or above | 15% | £10,000 |
Those are the FCA's rules for the claims companies it regulates. Law firms answer to the Solicitors Regulation Authority (SRA), which has its own fee rules. The FCA also says its cap doesn't apply if a CMC takes your claim to court.
Signing up twice is a real risk. In February 2026 the FCA and SRA said they'd seen clients with up to 4 representatives for the same claim. Their joint statement added: "We have seen several examples where clients are, or could be, charged excessive termination fees."
Already signed up and want out? You can end the agreement, but you may be charged a fee. The FCA says it should be reasonable and reflect the work already done. If you think you were signed up without consent, misled or treated unfairly, you can ask to leave for free.
I'd complain to the lender direct first. It's free, and the lender has to follow the same scheme rules either way.
How much could you get?
Nobody can tell you what you'll get yet. The FCA does publish an average. Its claims page says people who get compensation "will receive an average of around £830 per agreement". It adds that "this will vary, with some people getting more and some getting less".
Treat that as an average across millions of agreements. It isn't an estimate for yours. The FCA also says that in 1 in 3 cases the final amount will be capped.
Across the whole scheme, the FCA expects firms to pay around £7.5 billion in compensation. That total assumes 75% of eligible people take part. It's a figure for every claim added together, and it depends on the scheme surviving the challenge.
What happens next?
The tribunal hearing comes first. The Upper Tribunal will hear the challenge on 14 to 18 December 2026 or 16 to 26 February 2027. The FCA says the final dates depend on whether any party applies for more expert evidence or disclosure.
A ruling won't come on the day. The FCA expects a judgment "in the following months".
After that, it depends on the result. If the scheme is upheld and nobody appeals, the FCA expects payments to begin in 2027. If it's overturned, the FCA says it will need to decide what to do next.
One option is to tell lenders to settle complaints one by one. Lenders would then have 8 weeks to respond, and you could go to the Ombudsman afterwards. The FCA warns that a revised scheme could delay compensation until 2028 or beyond.
I won't guess which way it goes. We'll update this page once the tribunal rules.
FAQs
Am I owed money for car finance commission?
You might be. The FCA's scheme covers finance used to buy a car, motorbike or van between 6 April 2007 and 1 November 2024. You also need to have been kept in the dark about certain commission arrangements, and your lender has to check that, not you. Lenders don't have to pay anything under the scheme while the legal challenge runs.
Do I need to do anything right now?
You don't have to, but you can. If you haven't complained yet, you can complain to your lender now for free. If you've already complained, the FCA says you don't need to do anything further for now. Keep any letters or emails from your lender.
What agreements are covered? Does it include PCP as well as HP?
Yes, both are covered. The FCA says the scheme includes hire purchase agreements, such as personal contract purchase. Its policy statement names conditional sale agreements too. Leasing isn't covered, so personal contract hire is out.
Do I need a claims management company, and what can one charge?
No, you don't need one. The FCA says you don't need a claims management company or a law firm to take part in its scheme. You can complain to your lender yourself, and it's free. If you do use a firm, check you haven't already signed up with another one.
There's a fee cap for firms the FCA regulates. It runs from 30% on awards under £1,500 down to 15% on awards of £50,000 or more. Each band also has a maximum sum, and the firm can charge only the lower of the two. VAT is added on top. The FCA says fees can reach 36% of your compensation once VAT is included.
When will I actually get paid?
There's no payment date yet. The tribunal hears the challenge in December 2026 or February 2027, and a judgment is expected in the months after that. If the scheme is upheld and nobody appeals, the FCA expects payments to begin in 2027.
Is my complaint still being looked at if the scheme is suspended?
Partly. Lenders must still identify complaints and gather commission data. In most cases they must also tell you if you're not owed anything. What's on hold is working out and paying compensation. If you've already complained, the FCA says you don't need to do anything further for now.