UK Car Finance Scandal 2025: £30 Billion FCA Compensation Explained

Introduction

The UK is experiencing its largest-ever consumer finance scandal, with the Financial Conduct Authority (FCA) investigating widespread mis-selling of car finance agreements that could result in £30 billion in compensation to affected customers.

The shocking scale:

• 44% of all car finance agreements from 2007-2024 potentially mis-sold
• Over 10 million people could be eligible for compensation
• Average payout: £700 per agreement (some cases £1,000-£2,500+)
• Deadline: December 4, 2025 for lenders to respond to complaints
• First payments expected: Early 2026

If you've bought a car on finance since 2007, you could be owed money. The scandal centers on Discretionary Commission Arrangements (DCAs) where brokers and dealers secretly inflated interest rates to boost their own commissions—without your knowledge or consent.

This comprehensive guide explains what happened, how to check if you're affected, how to claim compensation, what the Supreme Court ruling means, and—critically for used car buyers—how to protect yourself when buying vehicles with outstanding finance.

Bottom line: If you took out car finance between 2007-2024, check if you were mis-sold. A simple claim could net you £700-£2,500+ in compensation, and understanding this scandal is essential for protecting yourself as a used car buyer today.

What is the Car Finance Scandal?

The Basics: How Car Finance Was Mis-Sold

For nearly two decades (2007-2024), car dealerships and finance brokers secretly manipulated car finance interest rates to maximize their own commissions at customers' expense.

The Normal Process (How It Should Work):

1. Customer visits dealership to buy a car
2. Customer asks about finance options
3. Dealer acts as broker, contacting lenders (e.g., Black Horse, MotoNovo)
4. Lender offers finance at a set interest rate
5. Dealer presents this rate to customer
6. Dealer receives a flat commission from lender (e.g., £500)

What Actually Happened (The Scandal):

1. Customer visits dealership to buy a car
2. Customer asks about finance options
3. Lender tells dealer: "We'll lend at 7% APR, but you can charge the customer up to 12% APR—and you get 50% of the extra interest"
4. Dealer inflates rate to 11.9% APR without telling customer
5. Customer pays £3,000 extra in interest over 4 years
6. Dealer pockets £1,500 extra commission
7. Customer has no idea they were overcharged

This practice was called Discretionary Commission Arrangement (DCA), and it was legal until banned by the FCA in 2021—but that doesn't make it fair.

Why This is a Scandal

The Problem with DCAs:

1. Secret Commission

• Customers weren't told the dealer would earn more by charging higher interest
• No transparency about how much commission was paid
• Conflict of interest: Dealer supposed to help you find best finance, but financially incentivized to give you the worst rate

2. Inflated Interest Rates

• Analysis shows customers paid 2-4% higher APR than necessary
• On a £15,000 car financed over 4 years:
  • Fair rate (7% APR): £359/month, £17,232 total
  • Inflated rate (11% APR): £389/month, £18,672 total
  • Extra cost: £1,440 (dealer pockets ~£700)

3. Vulnerable Customers Targeted

• Customers with poor credit charged the highest rates
• Those least able to afford it paid the most
• Sales pressure tactics: "This is the only rate available" (it wasn't)

4. Informed Consent Not Given

• Regulations require customers to consent to commissions that create conflicts of interest
• Most customers never told about DCA arrangement
• If they were told, it was buried in incomprehensible fine print

Types of Finance Affected

Personal Contract Purchase (PCP) - Most Common:

• Pay monthly for 3-4 years
• Optional final "balloon payment" to own the car
• Or return car and walk away
• 85% of new car finance in this period was PCP
• Highest risk for mis-selling (complex structure, high commissions)

Hire Purchase (HP):

• Pay monthly installments
• Automatically own car at end
• Simpler than PCP but still affected by DCAs

Conditional Sale:

• Similar to HP
• Own car once final payment made

NOT Affected:

• Cash purchases (no finance)
• Personal loans from banks (not arranged by dealer)
• Credit cards

The Legal Timeline: How We Got Here

2007-2021: The Wild West Era

Discretionary Commission Arrangements legal and widespread:

• Lenders actively encouraged dealers to use DCAs
• Industry standard practice
• Financial Ombudsman received scattered complaints, but systemic issue not identified

January 2021: FCA Bans DCAs

FCA prohibits Discretionary Commission Arrangements:

• New car finance agreements can't use DCAs
• Must use flat-rate commissions only
• But damage already done to millions of existing agreements

October 2023: Court of Appeal Bombshell

Court of Appeal Rules DCAs Unlawful:

• Landmark cases: Johnson v FirstRand and Wrench v FirstRand
• Court finds DCAs created undisclosed conflicts of interest
• Lenders had duty to obtain informed consent from customers
• Failing to disclose commissions = unfair relationship under Consumer Credit Act 1974

Impact:

• Floodgates open for compensation claims
• Lenders face potential £30 billion liability
• Industry in panic mode

December 2023: FCA Issues Holding Directive

FCA Pauses Complaint Handling:

• Firms told to pause responding to motor finance commission complaints
• Allows FCA to investigate properly
• Prevents chaos of inconsistent payouts

August 2025: Supreme Court Partially Overturns Ruling

Supreme Court Provides Clarity (Partial Victory for Lenders):

• Main finding: DCAs alone don't automatically create unfair relationships
• BUT: In Johnson v FirstRand, relationship was unfair due to:
  • High, undisclosed commission (£1,622 on £7,000 loan)
  • Misleading communications about rate competitiveness
  • Customer's lack of financial sophistication
  • Broker presented as impartial when they weren't

What This Means:

• Not everyone will automatically win compensation
• Cases evaluated individually
• Factors considered:
  • Size of commission relative to loan
  • Whether customer was misled
  • Customer's financial sophistication
  • Disclosure quality

October 2025: FCA Proposes Compensation Scheme

FCA Consults on Industry-Wide Redress:

• Announced October 7, 2025
• Covers agreements from 2007-2024
• Proposed average compensation: £700 per agreement
• Consultation originally until November 2025, extended to December 12, 2025

December 4, 2025: Lender Response Deadline

Firms Must Respond to Complaints by December 4, 2025:

• Covers both DCA and non-DCA commission complaints
• Lenders must provide final responses
• Sets stage for compensation payouts

February-March 2026: Final Compensation Rules (Expected)

FCA to Publish Final Scheme:

• Rules for who qualifies
• How compensation calculated
• How to claim
• Appeals process

2026 Onwards: Compensation Payments Begin

First Payouts Expected Early 2026:

• Automatic compensation for some cases
• Application process for others
• Estimated timeline: 18-36 months to process all claims

Who is Affected? Check If You're Owed Money

Eligibility Criteria

You MAY Be Eligible for Compensation If:

✓ You took out car finance between April 2007 and January 28, 2021 ✓ Finance arranged through a car dealership (not direct from a bank) ✓ Finance type: PCP, HP, or Conditional Sale ✓ You were not clearly told the dealer would earn higher commission by charging you a higher interest rate ✓ The commission was not properly disclosed when you signed the agreement

You Are NOT Eligible If:

✗ Finance taken after January 28, 2021 (DCAs already banned) ✗ Personal loan from bank arranged yourself (not through dealer) ✗ Cash purchase or credit card ✗ You were clearly informed of DCA and gave informed consent (very rare)

How to Check Your Finance Agreement

Step 1: Find Your Finance Documents

• Locate your original car finance agreement
• If you don't have it, request copy from lender

Step 2: Identify the Lender

• Common lenders involved:
  • Black Horse Finance (Lloyds Banking Group) - £1.2bn set aside
  • MotoNovo Finance (Bank of Ireland)
  • Santander Consumer Finance
  • Close Brothers Motor Finance - £165m set aside
  • Barclays Partner Finance - £325m set aside
  • FirstRand Bank (MotoNovo's predecessor)
  • Hitachi Capital (now Novuna Finance)

Step 3: Look for Red Flags

Interest Rate Higher Than Expected?

• Compare your APR to market rates at time of agreement
• If significantly higher (2-4%+), likely inflated

Commission Disclosure Section?

• Check agreement for clear statement about dealer commission
• If vague or absent, red flag

Were You Told Commission Amount?

• Did dealer disclose specific £ amount they'd earn?
• Did they explain commission increased with higher rates?
• If not, you have a claim

Step 4: Check Historic Interest Rates

• Google "Bank of England base rate [year]"
• Compare to your APR
• Typical fair markup: Base rate + 3-6%
• If your rate is base rate + 8-12%, likely inflated

Real-World Example: Was This Agreement Mis-Sold?

Case Study: Sarah's 2015 VW Golf PCP

Agreement Details:

• Vehicle: 2012 VW Golf 1.6 TDI
• Purchase price: £9,500
• Deposit: £1,000
• Amount financed: £8,500
• Term: 48 months
• APR: 12.9%
• Monthly payment: £245
• Total amount payable: £11,760
• Total interest: £2,260

Market Comparison (2015):

• Bank of England base rate: 0.5%
• Typical fair car finance APR (2015): 5-8%
• At 7% APR, same loan would cost: £203/month, £9,744 total
• Sarah overpaid: £2,016
• Dealer's estimated extra commission: £900-£1,000

Was Sarah's Finance Mis-Sold? YES - Clear signs:

1. APR 5-6% above market rate
2. No disclosure of commission arrangement in paperwork
3. Dealer told Sarah "this is the best rate available" (it wasn't)
4. Sarah was 24 at time, limited financial experience

Expected Compensation: £1,800-£2,200 (full interest difference + statutory interest)

How Much Compensation Can You Expect?

FCA's Proposed Average: £700

FCA Estimate:

• Average payout: £700 per agreement
• Based on typical DCA overcharge from 2007-2021
• Covers interest difference + statutory interest (8% per year)

But Many Will Receive More

Compensation Calculation Formula:

Total Compensation = (Interest Overpaid) + (8% Statutory Interest Per Year)

Example 1: Small Overpayment

• Finance agreement: 2018
• Interest overpaid: £500
• Years since agreement: 7 years
• Statutory interest: £500 × 8% × 7 = £280
• Total compensation: £780

Example 2: Large Overpayment

• Finance agreement: 2012
• Interest overpaid: £2,000
• Years since agreement: 13 years
• Statutory interest: £2,000 × 8% × 13 = £2,080
• Total compensation: £4,080

Example 3: Multiple Agreements

• Customer had 3 cars on finance (2010, 2014, 2018)
• Total overpayments: £1,200 + £900 + £700 = £2,800
• Statutory interest (averaged): £2,800
• Total compensation: £5,600+

Factors That Increase Compensation

1. Older Agreements (2007-2015)

• More years = more statutory interest
• Interest compounds significantly over 10-15 years

2. High APR vs Market Rate Gap

• Charged 14% APR when 6% was fair = large overpayment

3. Large Loan Amounts

• £20,000+ financed = bigger overpayments in absolute terms

4. Poor Credit Customers

• Often charged highest rates (15-20% APR)
• Biggest victims of mis-selling

Lender Provisions Indicate Scale

How Much Lenders Have Set Aside:

• Lloyds Banking Group: £1.2 billion
• Barclays: £325 million (increased from £90m)
• Close Brothers: £165 million

What This Tells Us: Lenders expect massive payouts, suggesting many will receive well above £700 average.

How to Claim Compensation

Step 1: Gather Your Evidence

Documents You Need: ✓ Original finance agreement (or request copy from lender) ✓ Proof of identity (passport, driving licence) ✓ Proof of address (utility bill, bank statement) ✓ Any correspondence from dealer about finance ✓ Bank statements showing finance payments

If You Don't Have Original Agreement:

• Contact lender directly (phone or email)
• Request "Subject Access Request" under GDPR
• Lender must provide within 30 days (usually free)

Step 2: Determine If You Should Claim Now or Wait

Option A: Claim Now (Before December 4, 2025)

Advantages:

• Get in the queue early
• Lender must respond by December 4, 2025
• If accepted, receive compensation sooner

Disadvantages:

• Lender may reject claim (you can appeal later)
• Individual assessment (not streamlined)
• Inconsistent outcomes

Best For: Clear-cut cases with obvious high APRs and no commission disclosure

Option B: Wait for FCA Compensation Scheme (February 2026)

Advantages:

• Standardized process (easier)
• Clear eligibility criteria
• May include automatic compensation for some
• Appeals process built-in

Disadvantages:

• Longer wait (payments mid-2026 onwards)
• Risk of lower standardized payouts

Best For: Borderline cases, people unsure if they qualify, those who want certainty

Step 3: Make Your Claim

If Claiming Now (Direct to Lender):

1. Write Formal Complaint

Template:

[Your Name]
[Your Address]
[Date]

[Lender Name]
Customer Complaints Department
[Lender Address]

Dear Sir/Madam,

Re: Motor Finance Commission Complaint - Agreement [Agreement Number]

I am writing to complain about the motor finance agreement I entered into on [date] for [vehicle details].

I believe this agreement involved a Discretionary Commission Arrangement (DCA) whereby the dealer/broker was incentivized to charge me a higher interest rate to increase their commission, and I was not given informed consent about this arrangement.

Specifically:
- I was charged [X]% APR
- Market rates at the time were approximately [Y]% APR
- I was not informed the dealer would earn higher commission by charging me a higher rate
- I was not given the opportunity to negotiate the interest rate

Under the Consumer Credit Act 1974 and following recent court rulings, I believe this created an unfair relationship. I request:
1. Full details of the commission paid to the dealer/broker
2. Recalculation of my agreement using a fair interest rate
3. Refund of overpaid interest plus statutory interest (8% per annum)

I look forward to your response within 8 weeks as required by FCA regulations.

Yours faithfully,
[Your Signature]
[Your Name]

2. Send Via Email + Recorded Delivery

• Email for speed
• Recorded delivery for proof

3. Wait for Response (Up to 8 Weeks)

• Lender must respond within 8 weeks
• Three possible outcomes:
  • Upheld: Compensation offered
  • Partially upheld: Lower compensation offered
  • Rejected: No compensation

4. If Rejected or Unsatisfactory

• Escalate to Financial Ombudsman Service
• Free service, independent adjudication
• Contact: financial-ombudsman.org.uk or 0800 023 4567

If Waiting for FCA Scheme (Recommended for Most):

1. Monitor FCA Announcements

• Check FCA website regularly: fca.org.uk
• Expected final scheme rules: February 2026

2. Register Interest

• Some lenders creating pre-registration lists
• Contact your lender to register interest

3. Follow Official Claims Process (When Launched)

• FCA will publish clear guidance
• Likely to be online portal
• Streamlined application

Step 4: Consider Using Claims Management Company

Claims Management Companies (CMCs) offer to handle claims for a fee.

Advantages:

• Handle paperwork for you
• Expertise in finance regulations
• Negotiate on your behalf

Disadvantages:

• Charge 20-35% of compensation (including VAT)
• Example: £1,000 payout = £250-£350 to CMC
• You can do this yourself for free

Our Recommendation:

• DIY claims first using free resources (Financial Ombudsman, MoneySavingExpert)
• Only use CMC if claim rejected and you need specialist help
• Choose FCA-regulated CMC only

Step 5: Receive Compensation

Timeline:

• Claims made now: Responses by December 4, 2025, payments early 2026
• FCA scheme claims: Applications from Feb 2026, payments mid-2026 onwards

Tax Treatment:

• Compensation not taxable (classed as repayment of overpaid interest)
• No need to declare on tax return

How You Receive It:

• Bank transfer (most common)
• Cheque
• Direct credit to current finance balance (if still paying off agreement)

What This Means for Used Car Buyers Today

The car finance scandal has critical implications for anyone buying a used car in 2025.

Risk 1: Outstanding Finance on Used Cars

The Problem:

• If previous owner still owes money on finance, the finance company owns the car
• You buy car unknowingly, finance company can repossess it from you
• You lose both the car AND your money

Why Finance Scandal Makes This Worse:

• Some customers, frustrated by mis-selling, stop paying their finance
• Finance companies repossess cars
• Dodgy sellers buy these cars at auction (cheap)
• Sell them privately without disclosing outstanding finance
• Unsuspecting buyer purchases, months later finance company repossesses it

How to Protect Yourself:

1. Always run comprehensive vehicle check (Carhealth £3.99)
   • Checks DVLA, finance databases, stolen status
   • Shows if outstanding finance registered
2. Ask seller directly: "Is there any outstanding finance on this vehicle?"
3. Get written confirmation: Seller signs statement "No outstanding finance"
4. Check finance settlement letter: If recently paid off, seller should have settlement confirmation

Risk 2: Inflated Prices Due to Finance

The Problem:

• Many buyers focus on monthly payment, not total cost
• Dealers exploit this: "Only £299/month" (over 6 years at 11.9% APR = massively overpriced)
• Car might be worth £12,000 but you pay £18,000 total

Post-Scandal Reality:

• Dealers can't use DCAs anymore (banned 2021)
• BUT still push long-term, high-APR finance
• Finance now typically flat-rate commission (dealer earns same regardless of APR)
• However, dealers still incentivized to sell finance (vs cash)

How to Protect Yourself:

1. Negotiate car price first (before discussing finance)
2. Get cash price quote, then compare finance total cost
3. Shop around for finance: Bank personal loans often cheaper than dealer finance
4. Calculate total cost: Monthly payment × Number of months = total you'll pay
5. Use Carhealth (£3.99) to verify car isn't overpriced vs market value

Risk 3: Pressure to Accept Dealer Finance

The Problem:

• Dealers make more profit from finance than selling the car
• Use sales tactics to push finance:
  • "Finance-only discount" (car cheaper if you take finance)
  • "We can't match your cash price without finance"
  • High-pressure: "Offer expires today"

Is This Legal?

• Yes, technically (as long as commission disclosed and not discretionary)
• But ethically questionable

How to Respond:

1. Know your rights: You can choose any finance provider
2. Get independent quote first: Personal loan from bank as comparison
3. Negotiate: "I'll pay cash at this price, or I'll take your finance but I want car £1,000 cheaper"
4. Walk away if pressured: Plenty of other cars available

Risk 4: Negative Equity from Overpriced Finance

The Problem:

• Customer bought car on expensive finance (pre-2021 with DCA)
• Car depreciated faster than loan paid down
• Now in negative equity (owe more than car worth)
• Examples:
  • £20,000 car financed at 12.9% APR over 5 years
  • After 3 years: Owe £9,000, car worth £7,000
  • Negative equity: £2,000

Why This Affects You as Buyer:

• Sellers in negative equity desperate to sell
• May try dodgy tactics:
  • Sell car privately while still on finance (illegal)
  • Hide true mileage to inflate value
  • Accept lowball offers (red flag—why so desperate?)

How to Spot This:

1. Seller very eager to sell quickly (red flag)
2. Price suspiciously low (might have hidden finance)
3. Seller evasive about finance history: "Was it on finance?" "Umm, maybe, can't remember"
4. Run Carhealth check (£3.99) to verify no outstanding finance

Protect Yourself: Essential Checks Before Buying

The Carhealth 5-Point Protection

Before buying ANY used car in 2025, run these checks:

1. Outstanding Finance Check (CRITICAL)

• Use Carhealth (£3.99) to check finance databases
• Confirms if finance company has legal ownership claim
• Why it matters: If outstanding finance exists, car can be repossessed from you

2. Stolen Status Check

• Verifies car not registered as stolen
• Checks Police National Computer database
• Why it matters: If stolen, police seize it, you lose money

3. Insurance Write-Off Check

• Shows if car previously Cat S, Cat N, Cat A, Cat B
• Write-offs depreciate 20-40% below market value
• Why it matters: Safety concerns + resale value tanks

4. Mileage Verification

• Cross-references MOT history for mileage discrepancies
• AI-powered clocking detection
• Why it matters: 1 in 16 UK cars clocked (£500m annual fraud)

5. Previous Keeper History

• Shows number of previous owners
• High turnover (5+ owners in 3 years) = red flag (hidden problems)
• Why it matters: Problem cars passed between dealers to hide issues

Cost: £3.99 one-time fee Time: 5 minutes Value: Protects against £5,000-£15,000+ losses

Additional Due Diligence

Free MOT History Check:

• Visit check-mot.service.gov.uk
• Enter registration number
• Review test history for mileage consistency

Meet Seller at Their Address:

• Verify seller actually owns the car (name on V5C matches address)
• Avoid "meet at supermarket car park" (red flag)

Ask Direct Questions:

• "Is there any outstanding finance?" (get written answer)
• "Has the mileage been altered?" (evasive answer = walk away)
• "Why are you selling?" (vague answer = suspicious)

Independent Inspection:

• Pay £150-£250 for AA/RAC inspection
• Worth it for cars over £8,000
• Checks mechanical condition, hidden damage

The Future: What Happens Next

Short-Term (December 2025 - March 2026)

December 4, 2025: Lender response deadline December 12, 2025: FCA consultation closes February 2026: FCA publishes final compensation scheme March 2026: First automatic compensation payments expected

Medium-Term (2026-2027)

Mass Compensation Payouts:

• Estimated 10 million+ customers eligible
• Payouts totaling £20-30 billion
• Streamlined claims process
• Financial Ombudsman handles disputes

Industry Changes:

• All dealers must clearly disclose finance commissions
• Standardized finance disclosure forms
• FCA increased scrutiny of motor finance sector
• Potential criminal prosecutions for egregious cases

Long-Term (2028+)

Consumer Protection Strengthened:

• Mandatory comparison of finance options (dealer vs personal loan)
• APR caps on motor finance (similar to payday loan caps)
• Annual reviews of finance fairness by FCA

Industry Consolidation:

• Smaller lenders exit market (can't afford compensation)
• Consolidation around major banks
• Fewer but more regulated finance providers

FAQs: Car Finance Scandal

Q: How do I know if my car finance was mis-sold? A: Check your finance agreement for APR. Compare to market rates at the time (Bank of England base rate + 3-6% is typical). If your rate is 2-4%+ higher and you weren't clearly told the dealer would earn extra commission by charging more, you likely have a claim.

Q: What is the deadline to claim compensation? A: Lenders must respond to complaints by December 4, 2025. However, the FCA compensation scheme (launching February 2026) will have its own deadlines. You have up to 6 years from discovery of mis-selling to claim, so don't panic if you miss December deadline—scheme will cover you.

Q: How much compensation will I get? A: FCA estimates average £700 per agreement. However, many will receive more depending on: (1) size of interest overpayment, (2) how long ago agreement taken out (statutory interest accumulates), (3) multiple agreements. Cases range from £400 to £4,000+.

Q: Do I need to use a claims management company? A: No. You can claim yourself for free. Claims management companies charge 20-35% of your compensation. Use free resources (Financial Ombudsman, MoneySavingExpert) first. Only use CMC if claim rejected and you need specialist help.

Q: I still owe money on my finance. Can I claim? A: Yes. Even if you're still making payments, you can claim compensation for mis-selling. Compensation may be: (1) cash refund, or (2) credit applied to reduce your outstanding balance.

Q: Will claiming affect my credit score? A: No. Making a legitimate complaint about mis-selling does not affect your credit score. Continue making your regular payments while claim is processed.

Q: What if the lender or dealer has gone out of business? A: If lender has ceased trading, claims may be handled by: (1) Financial Services Compensation Scheme (FSCS) if lender failed, or (2) successor company if business was sold. Contact FSCS (fscs.org.uk) for guidance.

Q: Can I claim if I bought the car second-hand on finance? A: Yes, as long as YOUR finance agreement (not previous owner's) was from 2007-2021 and arranged through a dealer/broker. The mis-selling relates to your agreement, not the car's history.

Q: How does this affect buying a used car today? A: Always run a comprehensive vehicle check (Carhealth £3.99) to verify no outstanding finance. The scandal has increased cases of cars sold with undisclosed finance (owners stopped paying due to mis-selling frustration). Protect yourself with proper checks.

Q: Are PCP agreements more likely to be mis-sold than HP? A: Yes. PCP agreements had higher commissions (due to complexity and larger total interest), so dealers had bigger incentive to inflate rates. However, both PCP and HP can be mis-sold—check your agreement regardless of type.

Conclusion

The UK car finance scandal is the largest consumer finance mis-selling case in history, potentially costing lenders £30 billion and affecting over 10 million customers. If you took out car finance between 2007-2021, you could be owed £700-£2,500+ in compensation.

Your Action Plan:

If You Had Finance 2007-2021:

1. Locate your finance agreement (or request from lender)
2. Check your APR vs market rates at time
3. Decide: Claim now (before Dec 4, 2025) or wait for FCA scheme (Feb 2026)
4. Submit complaint to lender or wait for streamlined scheme
5. Monitor claim progress and appeal if rejected

If You're Buying a Used Car:

1. Always run Carhealth check (£3.99) for outstanding finance verification
2. Ask seller directly about finance history (get written confirmation)
3. Negotiate car price BEFORE discussing finance
4. Shop around for finance (bank personal loans often cheaper than dealer)
5. Calculate total cost (monthly payment × term length)
6. Never meet seller at neutral location (verify address matches V5C)

If You're Taking Finance Now:

1. Ensure dealer discloses commission amount in writing
2. Compare dealer APR to personal loan rates
3. Negotiate total price, not monthly payment
4. Read all finance documents carefully before signing
5. Ask: "What commission will you earn from this finance?" (they must tell you)

The scandal has fundamentally changed the car finance industry, providing stronger consumer protections. But vigilance is still essential—dealers still profit from finance sales, and temptation to exploit customers remains.

Don't leave money on the table. Check if you're owed compensation, and protect yourself with proper vehicle checks before buying.

A £3.99 Carhealth check could save you from a £5,000-£15,000 loss due to undisclosed finance, and a simple compensation claim could net you £700-£2,500+ for past mis-selling.

The scandal is real. The compensation is real. Make sure you're protected.

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Sources:

• FCA: Firms given until December 2025 to respond to motor finance commission complaints
• FCA: Key considerations in implementing a possible motor finance consumer redress scheme
• Car finance claimants compensation - what you should know
• Money Saving Expert: Car finance mis-selling latest