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Disclaimer: This content is educational and does not constitute legal or financial advice. Always seek independent advice before making a claim.
Your Rights as a Car Finance Customer — And How to Use Them
When you signed a car finance agreement, you entered into a regulated financial contract. That comes with legal protections — protections that many UK drivers don't know they have, and that the motor finance industry, for years, relied on customers not exercising.
The FCA's investigation into discretionary commission arrangements (DCAs) in motor finance has brought those rights sharply into focus. If a dealer secretly inflated your interest rate to earn a higher commission, and you were never told, that isn't just poor practice. Under UK financial regulation and common law, it may constitute an unlawful secret commission — and give you the right to claim redress.
The Car Claim Check is your starting point for finding out whether those rights apply to you.
What UK Law Says About Undisclosed Commissions
The legal basis for motor finance mis-selling claims is stronger than many people realise — and it has been reinforced significantly by recent court decisions.
Under UK law, a credit broker — which is what a car dealership becomes when it arranges finance for you — owes you a duty of loyalty. If that broker receives a commission from the lender that you are not told about, and if that commission influences the terms of your agreement, the broker may be in breach of that duty.
In 2024, the Court of Appeal ruled that undisclosed commission payments in car finance arrangements were unlawful — a landmark decision that gave significant weight to the hundreds of thousands of complaints already in the system, and opened the door to further claims.
The FCA has since been working on a framework for industry-wide redress, which could result in automatic compensation for eligible consumers without the need for individual complaints in every case.
⚖️ The key legal principles behind motor finance claims +
Secret commission — Under established case law, a broker cannot receive a secret commission that influences the advice or terms they provide to a client. If discovered, the client may be entitled to recover the commission and any resulting losses.
Conflict of interest — A dealer who earns more by setting a higher interest rate has a direct financial conflict with the customer. UK financial regulation requires that conflicts of interest be disclosed — failure to do so may give rise to a claim.
FCA CONC rules — The FCA's Consumer Credit sourcebook (CONC) sets out obligations for credit brokers, including requirements around disclosure and treating customers fairly. DCAs may have breached several of these obligations.
What You Are Entitled to Claim
If your agreement was affected by an undisclosed DCA, you are generally entitled to recover:
- The excess interest you paid as a result of the inflated rate — the difference between what you paid and what a fair rate would have cost
- In some cases, compensatory interest on that overpayment, calculated from the date the excess was charged
- Potentially, a contribution to any costs incurred in pursuing the claim, depending on the route taken
The FCA has estimated that the average affected consumer could recover around £700, though amounts vary considerably depending on the size and length of the agreement and the degree of rate inflation involved.
📋 Example: calculating the excess +
A customer takes out a £14,500 PCP agreement over 48 months with a £2,000 deposit. Their rate was set at 11.2% APR. Independent evidence suggests a fair market rate at the time was 7.7% APR — a difference of 3.5 percentage points.
The estimated excess interest paid over the term: £950–£1,250.
Under the legal principles established by the Court of Appeal, the customer may be entitled to recover this amount in full, plus interest.
How to Exercise Your Rights
Your rights don't expire automatically — but acting sooner rather than later is advisable, particularly as the FCA moves towards finalising a formal redress framework.
Step 1 — Run the Car Claim Check
Use the eligibility checker above to get a free estimate of your potential claim based on your
agreement details. This takes a few minutes and requires no specialist knowledge.
Step 2 — Request your documents if needed
Under the UK GDPR and Data Protection Act 2018, you have the right to request
all personal data held about you by your lender — including your original finance agreement, the
interest rate applied, and any commission documentation. This is a free Subject Access Request
(SAR), and your lender must respond within 30 days.
Step 3 — Submit a formal complaint
You can complain directly to your lender at no cost. Your complaint should state that you were
not informed of any commission arrangement and that your interest rate may have been set higher
as a result. Your lender must acknowledge your complaint and investigate it.
Step 4 — Escalate if necessary
If your lender rejects your complaint or does not respond within the required timeframe, you have
the right to refer the matter to the Financial Ombudsman Service (FOS) — a free,
independent service that makes binding decisions on financial disputes.
Who Is Covered?
Your rights apply if:
- You took out a PCP, HP, or conditional sale agreement through a UK dealership
- The agreement was arranged between April 2007 and January 2021
- The dealer acted as a credit broker — that is, they introduced you to the lender rather than lending directly
- You were not given clear disclosure of any commission arrangement or conflict of interest
🏦 Lenders subject to the FCA investigation +
Black Horse (Lloyds Banking Group), Santander Consumer Finance, Close Brothers Motor Finance, MotoNovo Finance, Barclays Partner Finance, Moneybarn, Volkswagen Financial Services, BMW Financial Services, and FirstRand are among the lenders most frequently involved in DCA-related claims. The FCA's review is industry-wide — your lender does not need to be listed here for a claim to be valid.
Frequently Asked Questions
Do I have a legal right to know if my dealer was paid commission?
Yes. Under FCA rules that apply to credit brokers, there are specific disclosure obligations around commission. The Court of Appeal's 2024 ruling confirmed that failing to disclose a commission that influences the terms of an agreement may constitute an unlawful secret commission, giving consumers the right to seek redress.
Can my lender refuse to engage with my complaint?
Lenders are legally required to acknowledge and investigate complaints under FCA rules. If a lender fails to respond within the required timeframe, or rejects your complaint without adequate justification, you have the right to refer the case to the Financial Ombudsman Service, whose decisions are binding on the lender.
Is there a time limit on making a claim?
The FCA has paused standard complaint timelines during its investigation. However, limitation periods under general law may still apply in some circumstances, and the FCA is expected to confirm deadlines as part of its redress framework. Taking action now — even if only to run the Car Claim Check above and register your interest — is the safest approach.
How much could I receive if my claim succeeds?
The FCA estimates the average affected consumer could recover around £700, though individual amounts vary widely. The key variables are the amount financed, the interest rate differential, and the length of the agreement. Use the eligibility checker above for a personalised estimate.
What if I used a finance broker rather than a dealership?
The same principles may apply. Any credit broker who received an undisclosed commission that influenced your interest rate may have breached their duty to you — whether they were a car dealership, an online broker, or another intermediary. Independent legal advice is recommended if your agreement was arranged through a broker rather than directly at a dealership.
This content is for educational purposes only and does not constitute legal or financial advice. Car Claim Calculator is not a law firm or regulated financial adviser. Always seek independent advice before making a claim.