Who is eligible for car finance compensation?

The FCA's redress scheme covers PCP and hire-purchase (HP) car finance agreements taken out between 6 April 2007 and 1 November 2024, where the lender paid commission to the broker or dealer and the customer was not made properly aware of it. The FCA estimates around 12.1 million agreements could be in scope.

How much money could I get?

It varies by agreement, but the FCA's central estimate is roughly £700 per affected agreement on average — some will be more, some less, depending on the size of the loan and the commission involved. The whole scheme is expected to pay out around £7.5 billion.

When will payouts start?

The scheme was originally due to begin in July 2026 but is now expected to be delayed, likely to around November, after several legal challenges from lenders. Once running, the FCA expects millions of claims to be settled during 2026 and the vast majority by the end of 2027.

Do I need to pay a claims management company?

No. You can complain directly to your lender for free, and if the redress scheme applies you may not need to do anything at all once it is live. Claims firms typically take a cut of any payout — often around a third — for work you can do yourself in minutes.

How do I know who my car finance was with?

Check your original finance paperwork or bank statements for the lender's name and your agreement number. If you can't find them, you can ask the dealer or lender, or use a free credit report, which lists past and present credit agreements including car finance.

Car Finance Compensation 2026: Are You Owed Money? (And How to Claim Free)

If you've ever bought a car on finance, you may be owed money — and you almost certainly don't need to pay anyone to get it. The Financial Conduct Authority (FCA) is rolling out an industry-wide redress scheme worth around £7.5 billion, covering millions of PCP and hire-purchase agreements. Here's the plain-English version: who's affected, how much, when, and how to claim without losing a chunk to a claims firm.

What this is actually about

For years, when you bought a car on finance, the dealer often earned a commission from the lender — and in many cases the way that commission worked (sometimes the higher your interest rate, the more the dealer earned) wasn't clearly explained to you. The FCA has concluded that millions of customers were treated unfairly as a result, and has set up a scheme to put money back in their pockets.

It's one of the biggest consumer-redress exercises since PPI — and like PPI, the most important thing to know is that you can claim for free.

Are you eligible?

The scheme covers car finance agreements that meet all of these:

A PCP or hire-purchase (HP) agreement (the most common ways to finance a car)
Taken out between 6 April 2007 and 1 November 2024
Where the lender paid commission to the broker or dealer, and you weren't properly told about it

The FCA estimates around 12.1 million agreements could be in scope. If you bought a car on finance in that window — including cars you've since sold or finished paying off — it's worth checking.

How much might you get?

It depends on the size of your loan and the commission involved, but the FCA's central estimate is around £700 per affected agreement on average. Some people will get more, some less. If you had several car-finance agreements over the years, each could be assessed separately.

When will the money arrive?

This is the part still in motion. The scheme was originally due to start in July 2026, but it's now expected to be delayed — likely to around November — after several lenders launched legal challenges (including CA Auto Finance, Mercedes-Benz Financial Services and Volkswagen Financial Services). Once it's running, the FCA expects to settle millions of claims during 2026, with the vast majority paid by the end of 2027.

In short: don't expect money tomorrow, but it's coming.

How to claim — for free

Here's the key message: you do not need a claims management company. They typically take a cut of your payout — often around a third — for something you can do yourself in a few minutes.

Find out who your finance was with. Check your old finance paperwork or bank statements for the lender's name and agreement number. Can't find them? A free credit report lists your past and present credit agreements, including car finance.
Complain directly to the lender, saying you believe you weren't told about commission on your agreement. Keep it simple and factual.
Wait for the scheme. Once the FCA's redress scheme is live, many eligible customers will be contacted automatically — so in a lot of cases you may not need to do anything at all.

If you've already complained, you'll generally be dealt with sooner.

A word of caution

Where there's a big payout, scams follow. Be wary of texts, emails or calls promising to "claim your car finance refund" — especially any asking for upfront fees or bank details. The genuine route is always free, either direct to your lender or through the official scheme.

The bottom line

Millions of UK drivers are in line for a share of £7.5 billion — and getting it doesn't have to cost you a penny. Dig out who your old car finance was with, complain directly if you want to get ahead of the queue, and ignore anyone trying to charge you for the privilege. While you're thinking about your car's finances, it's also worth knowing what it's actually worth today — a free valuation takes seconds.

This article is general information, not financial advice. For the official details, see the FCA's guidance on the motor finance redress scheme.