What went wrong
Between 2007 and 2024, many car finance agreements, particularly PCP and HP deals, allowed the dealership arranging your finance to influence the interest rate you were charged. Under certain commission structures, known as discretionary commission arrangements, the dealer could earn more commission by setting a higher interest rate, without this being properly explained to you at the time.
The Financial Conduct Authority investigated this practice and found it was widespread across the industry, affecting a large number of agreements over an extended period.
What the FCA has done about it
In March 2026, the FCA published PS26/3, confirming a mandatory redress scheme requiring lenders to proactively review historic PCP and HP agreements from 2007 to 2024 and pay redress to customers who were affected, rather than requiring every customer to bring an individual complaint.
Why there's still uncertainty on timing
Four separate legal challenges are currently before the Upper Tribunal, brought by lenders and a consumer group contesting aspects of the scheme. Until these are resolved, the exact process and timing for payments can't be finalised with complete certainty.
Based on the current position, first payments to people who've already lodged a complaint are expected from around February or March 2027. This is our current understanding, not a guarantee, and we'll keep this page updated as the legal position develops.
What this means for you
- If you had a PCP or HP agreement between 2007 and 2024, it may be covered by the scheme
- You don't need to have complained already to be covered, though if you have, that may affect your position
- You don't need to use a solicitor or claims management company to pursue a motor finance complaint. You can contact your lender directly free of charge
If your lender has since gone out of business, this guide explains what that means for your claim.