--- title: "The FCA car finance compensation scheme" description: "If you financed a car, motorbike or van between 6 April 2007 and 1 November 2024, you may be owed money. The average payout is £830, and you have until 31…" canonical: "https://totalcreditcheck.co.uk/help-centre/articles/the-fca-car-finance-compensation-scheme/" topic: "Loans and car finance" published: 2026-06-22 updated: 2026-07-15 author: "Harry Austin" publisher: "Total Credit Check (Piomes Ltd)" --- # The FCA car finance compensation scheme Around 12.1 million car finance agreements qualify for compensation. Here's whether yours is one of them, how to track down the paperwork, and why you shouldn't use a claims company. **The short version:** if you financed a car, motorbike or van between 6 April 2007 and 1 November 2024, you may be owed money. The average payout is £830, and you have until 31 August 2027 to claim. Landmark UK court rulings, following an FCA review of over **32 million agreements**, confirmed that many car finance firms failed to adequately disclose commissions — leading to a large-scale compensation scheme. The FCA has published final rules, but the timetable slipped after four legal challenges were filed in late April and early May 2026. **Payouts are due to begin in November 2026.** ## What the scheme is The FCA formally identified extensive mis-selling of discretionary commission arrangements, high commission agreements and contractual ties in the motor finance market. The findings came from the FCA's [credit information market study](https://www.fca.org.uk/publications/market-studies/ms19-1-credit-information-market-study), which concluded these undisclosed arrangements gave brokers and dealers strong financial incentives to inflate interest rates. The scheme was announced in **March 2026** and is **free for consumers**. It splits into two: - **Scheme 1** — agreements entered into from **6 April 2007 to 31 March 2014** - **Scheme 2** — agreements entered into from **1 April 2014 to 1 November 2024** It covers three categories of undisclosed or inadequately disclosed arrangement: - **Discretionary commission arrangements (DCAs)** — where a broker could increase the customer's interest rate to earn more commission. - **High commission arrangements** — the commission had to clear two thresholds at once: **39% or more of what the credit cost you**, and **10% or more of the sum borrowed**. - **Contractual ties** — the broker was locked to a single lender, or had to offer that lender first refusal. There's an exception where the relationship between lender, manufacturer and franchised dealer was plain to see anyway. How much you get depends on how badly you were treated. Where the conduct was worst, the whole commission comes back to you with interest on top. The more usual outcome is a formula: the FCA takes the estimated overpayment and the commission actually paid, **averages the two, and adds compensatory interest**. ## Who is eligible Three things have to line up. The finance must have been **PCP or Hire Purchase** on a car, motorbike, van or campervan. It must have been taken out somewhere in the window running from **6 April 2007 to 1 November 2024**. And the disclosure must have fallen short — a DCA, a high-commission arrangement or a qualifying contractual tie that nobody properly explained to you. Meet all three and you can join the scheme. The FCA expects **only around 37%** of agreements from that period to qualify — roughly **12.1 million agreements**. Exclusions are set out in the FCA's [policy statement](https://www.fca.org.uk/publication/policy/ps26-3.pdf) on the motor finance consumer redress scheme. ## How to find old agreements Start with the obvious records: - **Old bank statements**, looking for Direct Debits to identify who you were paying - **The dealer** that arranged the finance - **Confirmation letters** - **Your emails** - **Any paperwork** you still have **Credit reports** help too. The FCA says your lender may be listed on your credit file, and points consumers to free credit report access routes. If the agreement was active in the **last six years**, your provider should usually be visible. Lenders don't always report to all three agencies, which is why seeing Experian, Equifax and TransUnion together is useful here. **Worth knowing:** an agreement that ended before roughly May 2020 may no longer appear on a standard credit report. Older complaints often depend on bank statements, dealer records and lender records instead. ## What your credit file shows Your file is useful for identifying the account, but it **isn't designed to tell you whether commission was hidden** or whether the lender breached disclosure rules. [Your credit report](https://totalcreditcheck.co.uk/help-centre/articles/credit-reports-and-scores-the-basics/) contains account names, balances and payment statuses. So it can prove an agreement existed and identify the lender if it was active on or after May 2020 — but it won't usually show the commission structure that makes an agreement eligible. ## How to make a claim **The FCA's official advice is to complain directly to your lender, free, rather than going through a claims company.** The FCA has published a public lender directory with genuine contact details, complaint forms and template letters. Using a claims management company or law firm **won't get you money any faster**, and the FCA warns it can cost **up to 36%, including VAT**, of any compensation. Include enough information for the lender to identify the agreement: - Your name - Previous names - Address history - Approximate dates of the finance - Vehicle details - Any agreement reference number The lender should acknowledge your complaint, then tell you whether you're due compensation and how much. **If you've already complained and have an acknowledgement, you don't need to do anything further.** Lenders were only required to contact you if they believed you were likely owed money. **If you haven't been contacted, you have until 31 August 2027 to complain and join the scheme.** ## The legal challenge The scheme remains under challenge. On **1 May 2026** the FCA confirmed four legal challenges, from Consumer Voice (represented by Courmacs Legal), Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance. A week later, on **8 May 2026**, the regulator conceded it had no clear view of when the Tribunal would hear the cases — only that October 2026 was the earliest realistic date. Payouts are still expected to start that November. The challengers want the Upper Tribunal to strike down the rules, in whole or in part. Their arguments fall into three groups. **Whether the regulator can do this at all.** Two grounds go to authority: whether the FCA's statutory powers stretch far enough to make rules of this kind, and whether it has properly applied the integrity objective it relied on. **How far back the scheme reaches.** Lenders dispute the decision to capture agreements signed before **1 April 2014**, and the approach taken to limitation periods. Both widen the pool of eligible claims considerably, which is why they are being fought hardest. **How the money is calculated.** The remaining grounds attack the redress formula itself, along with the assumptions the FCA has made about when a lending relationship was unfair and what that actually cost the borrower. The broadest claim of the set is that compelling lenders to pay out interferes with their property rights under the **Human Rights Act 1998**. A further update on **20 May 2026** confirmed the FCA was in discussion with the Tribunal and the challengers about whether parts of the rules might be paused while preparatory work carries on regardless. Despite the delays, the **31 August 2027** deadline stands. It's worth tracking down your agreement details sooner rather than later. ## The key things to remember - Covers PCP and HP agreements from 6 April 2007 to 1 November 2024. - Around 12.1 million agreements qualify — about 37% of those made in the period. - Average payout is £830; payouts begin November 2026. - Three triggers: discretionary commission, high commission, or contractual ties. - Complain directly to your lender for free — claims companies can take up to 36%. - Agreements ending before around May 2020 may not show on your credit report. - Your credit file proves the agreement existed but won't show the commission structure. - The deadline to claim is 31 August 2027.