Consumer Calculator

Mis-Sold PCP Car Finance Compensation Checker 2025 — FCA Investigation

The FCA is investigating whether millions of car finance customers were mis-sold finance agreements because dealers secretly inflated interest rates through "discretionary commission arrangements" (DCAs). The Supreme Court ruled in favour of consumers in October 2024. Check if you may be affected.

Your Car Finance

Your Compensation Estimate

Potential claim value
£0
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Claim eligibility
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DCA era agreement?
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Estimated overpaid interest
£0
8% statutory interest
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FCA deadline to claim
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Next step
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What Are Discretionary Commission Arrangements (DCAs)?

A discretionary commission arrangement (DCA) was a system used by many car finance lenders between 2007 and 2021. Under a DCA, the car dealer or broker had the discretion to set the interest rate on a finance agreement — within a range set by the lender. Crucially, the higher the interest rate the dealer set, the more commission they received. This created a direct financial incentive for dealers to charge customers the highest interest rate possible, without telling the customer about this conflict of interest.

The Financial Conduct Authority (FCA) banned DCAs from 28 January 2021, recognising that this arrangement was fundamentally unfair to consumers. However, the ban was not retrospective — agreements made before that date were not automatically unfair, but the FCA subsequently opened an investigation into historical DCA lending to determine whether customers were mis-sold and should receive compensation.

The Supreme Court Ruling — October 2024

In October 2024, the Supreme Court handed down a landmark ruling in cases involving Close Brothers and FirstRand Bank. The court held that a car dealer acting as a credit broker owes a fiduciary duty to the customer — meaning the dealer must act in the customer's best interest and cannot accept a secret commission from the lender without the customer's fully informed consent. This ruling went further than just DCAs — it potentially applies to any undisclosed commission arrangement in car finance, not just those where the dealer had discretion over the interest rate.

The ruling significantly widened the potential scope of compensation claims. Industry analysts estimate that between 10 and 40 million car finance agreements could be affected, with total compensation potentially running into tens of billions of pounds. Major lenders including Lloyds Banking Group (Black Horse), Santander Consumer Finance, and Close Brothers have set aside substantial provisions to cover potential claims.

Who Could Be Entitled to Compensation?

Based on the current state of the law following the Supreme Court ruling, you may have a claim if:

  • You took out a PCP, hire purchase, or other regulated car finance agreement at any point between January 2007 (when the FCA assumed responsibility for regulating credit) and January 2021 (when DCAs were banned)
  • The dealer or broker received a commission from the finance company that was not disclosed to you or was not adequately disclosed
  • Your interest rate was higher as a result of the DCA (though the Supreme Court ruling may also apply to flat-rate commissions that were not disclosed)

If your finance was taken after January 2021, or if the commission was clearly disclosed to you at the time, your claim may be weaker. However, the full scope of who qualifies will be determined by the FCA's redress scheme, which is expected to be confirmed in 2025 or 2026.

How to Make a Claim — For Free

This is critically important: you do not need to pay a claims management company to make a car finance mis-selling claim. Claims management companies (CMCs) have been advertising heavily and may charge 20–30% of any compensation you receive. You can make your claim directly for free:

  1. Write to your finance company — make a formal complaint referencing the FCA investigation and DCAs. Keep a copy of everything.
  2. If rejected or not resolved within 8 weeks — refer your complaint to the Financial Ombudsman Service (FOS) free of charge at financial-ombudsman.org.uk
  3. Wait for the FCA redress scheme — the FCA is consulting on a scheme that would automatically compensate eligible customers without requiring individual complaints. This is expected in late 2025 or early 2026.
⚠️ Do not pay a claims management company for car finance mis-selling claims. The process is free. CMCs charging percentage fees will significantly reduce any compensation you receive.

How Much Could You Be Owed?

Compensation calculations are complex and will depend on the specific interest rate you were charged versus what you should have been charged, the term of the agreement, and any applicable interest. Industry estimates suggest average claims of £400–£2,000 for typical PCP agreements, with larger claims for higher-value vehicles or longer finance terms. The 8% statutory interest that the Financial Ombudsman typically adds to financial compensation claims can significantly increase the amount over time.

I've already paid off my car finance — can I still claim?+
Yes — your eligibility is not affected by whether the finance has been repaid. The claim relates to the interest you were overcharged at the time — not your current balance. You need to identify who your finance company was and the approximate date and amount of the agreement. Old documents, bank statements showing the company name, or your credit file can help you reconstruct this information.
How long do I have to make a claim?+
The FCA has extended the deadline for finance companies to respond to complaints while the investigation continues. The final deadline for complaints and the redress scheme is not yet finalised — monitor fca.org.uk for updates. There are general limitation periods that apply (typically 6 years from the agreement, or 3 years from when you became aware of a potential claim), but the FCA process may supersede these.
Does this affect van or motorcycle finance too?+
The FCA investigation specifically covers car finance (including SUVs and light commercial vehicles purchased for personal use). Motorcycle finance and van finance used for business purposes may be covered by different rules. If in doubt, make a complaint and let the lender or Financial Ombudsman assess eligibility.