If you financed a car, van, or motorbike between 2007 and 2021, you might be entitled to car loan mis-selling compensation.
The ongoing car finance scandal in the UK has highlighted widespread issues with undisclosed commissions and unclear terms in vehicle financing agreements. Your Lawyers specialises in helping consumers navigate these claims to recover what they are owed.
This article breaks down the key aspects of the issues, eligibility, and how to proceed.
Car loan mis-selling refers to situations where finance providers and dealers may have failed to disclose commissions or presented unclear terms, leading to higher interest rates for consumers. This can involve discretionary commission arrangements (DCA), where dealers could increase interest rates to earn higher commissions without informing buyers. The Financial Conduct Authority (FCA) banned these practices in 2021, but millions of agreements prior to that date may be affected.
According to the recent data, around 14 million unfair motor finance agreements could qualify for payouts, with an average compensation of hundreds of pounds or even thousands of pounds per agreement. These issues often occurred in popular finance options like Personal Contract Purchase (PCP) or Hire Purchase (HP), where hidden commissions inflated costs. Unclear terms might include vague explanations of fees, interest calculations, or the overall affordability, leaving consumers overpaying without realising it.
The FCA is consulting on an industry-wide redress scheme, with payouts potentially starting in 2026. This scheme aims to ensure fair compensation for those impacted by these practices.
Determining eligibility for car loan mis-selling compensation starts with checking if your finance agreement involved undisclosed commissions or unclear terms. Key signs include:
Even if you no longer own the vehicle or have paid off the loan, you could still potentially claim. The FCA estimates that consumers might recover two-thirds of the overpaid commission. Complaints were under a pause until December 4, 2025, whilst the FCA finalises rules, but preparing now is crucial. If your finance was through major lenders, you are more likely to be affected, as these were common in the scandal.
Your Lawyers makes the claims process straightforward and worry-free with our no-win, no-fee service. Our experienced team can review your agreement details, gather evidence, and handles all communications with the finance provider. We have successfully assisted thousands in similar compensation claims, ensuring you get the maximum payout without upfront costs.
We can guide you through submitting a complaint, appealing if needed, and escalating to the courts if necessary. Remember, acting soon can position you for timely compensation claims.
Do not miss out on potential compensation—contact Your Lawyers today for a free eligibility check.
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