🚗 Reclaim Car Finance Commission in the UK: What You Need to Know (2025 Guide)
If you bought a car on finance in the UK any time between 2007 and 2021, you may be entitled to a refund of hidden commission charges. Millions of consumers may have been misled into agreements where dealers or brokers received undisclosed commissions, costing buyers more in interest than necessary.
In this guide, we’ll explain how to check if you’re owed money, how the reclaim process works, and how to reclaim car finance commission even if your loan is already settled.
💬 What Is Car Finance Commission?
Car finance commission refers to the payment a car dealership or broker receives from a lender for arranging your car finance. While commission in itself isn’t illegal, problems arise when:
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The commission was not disclosed to the buyer
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The dealer had an incentive to offer higher interest rates (to earn more commission)
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You were led to believe the finance deal was in your best interest, when it wasn’t
This practice was widespread across Hire Purchase (HP) and Personal Contract Purchase (PCP) agreements — especially before the Financial Conduct Authority (FCA) banned discretionary commission models in January 2021.
⚖️ Why Can You Reclaim Car Finance Commission?
In 2024, the FCA announced it was investigating whether consumers were treated unfairly due to hidden commissions. Some lenders may have:
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Misled customers by not disclosing commission
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Allowed brokers to inflate interest rates for personal gain
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Failed to meet fair lending practices
If your lender is found to have breached these principles, you could be entitled to compensation — possibly hundreds or even thousands of pounds.
🔍 Am I Eligible to Reclaim Car Finance Commission?
You may be eligible if you:
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Took out a car finance deal between 2007 and 2021
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Used a dealer, broker or car finance provider to arrange your finance
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Were not told about any commission arrangement
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Had a HP or PCP agreement (not personal loans or credit cards)
Even if you’ve already paid off the loan, you can still make a claim.
📄 What Types of Finance Are Affected?
| Finance Type | Eligible? | Notes |
|---|---|---|
| PCP (Personal Contract Purchase) | ✅ Yes | Most commonly affected |
| HP (Hire Purchase) | ✅ Yes | Also widely used with commission |
| PCH (Personal Contract Hire) | ❌ No | Technically leasing, not credit |
| Personal loans (bank) | ❌ No | Direct loans are excluded |
🏦 Examples of UK Car Finance Providers Involved
Claims could involve car finance arranged through or by:
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Black Horse Finance (Lloyds Banking Group)
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Barclays Partner Finance
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Close Brothers Motor Finance
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MotoNovo Finance
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Santander Consumer Finance
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VWFS (Volkswagen Financial Services)
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BMW Financial Services
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Ford Credit UK
This list is not exhaustive — if you financed a car through any UK dealer or broker, it’s worth checking.
📝 How to Start a Car Finance Commission Reclaim
You have two options: DIY (free) or using a claims management company (which takes a fee).
🔹 1. Submit a Complaint Directly to the Lender
Steps:
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Find your lender’s contact info
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Submit a formal complaint stating:
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The date and type of agreement
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That commission was not disclosed
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You believe the interest may have been unfairly inflated
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Wait up to 8 weeks for a response
Use this free car finance complaint template
🔹 2. Escalate to the Financial Ombudsman Service (FOS)
If the lender rejects your complaint or doesn’t reply within 8 weeks, you can complain to:
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Financial Ombudsman Service (opens in a new tab)
It’s free and independent, but it may take several months to process your case due to high volumes.
🔹 3. Use a Claims Management Company (Optional)
These companies offer to handle the process for you, but they:
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Charge up to 30%+ VAT of any successful claim
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Can’t guarantee a quicker or better result
Caution: Always use an FCA-regulated firm if you go this route. Check the FCA Register before signing anything.
💷 How Much Could You Be Owed?
The amount varies based on:
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The size of the loan
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The interest rate you were charged
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The duration of the finance agreement
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Whether commission led to a higher rate
Some consumers may be refunded hundreds to several thousand pounds, including:
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Refund of overpaid interest
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Compensation for unfair treatment
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8% statutory interest
Example: If you borrowed £10,000 and were overcharged by 2% interest for 48 months, you could reclaim £800–£1,200 or more.
⏳ What Is the Deadline to Claim?
There is currently no hard deadline, but the FCA is considering a formal redress scheme (similar to PPI). Acting early means you avoid missing out if time limits are introduced later.
You must complain within 6 years of the agreement or 3 years from when you became aware of the issue.
📊 Does Reclaiming Affect My Credit Score?
No, reclaiming money from a past finance agreement does not affect your credit score or your future ability to borrow.
However, if you’re currently in arrears or have defaulted, speaking with a free debt advisor before making a claim is advisable.
Use StepChange or MoneyHelper for support.
✅ Step-by-Step Summary: Reclaim Car Finance Commission
| Step | Action |
|---|---|
| 1 | Check your old car finance documents (2007–2021) |
| 2 | Submit complaint to the lender directly |
| 3 | Wait up to 8 weeks for a response |
| 4 | Escalate to Financial Ombudsman if unresolved |
| 5 | Receive refund if successful (plus interest) |
🛠️ Useful Tools and Templates
🧠 Final Thoughts: Should You Reclaim?
If you believe you were misled or weren’t informed about commission on your car finance agreement, it’s well worth checking. You have nothing to lose — and potentially hundreds or even thousands to gain.
The reclaim process is free if you do it yourself, and there’s no impact on your credit score. With the FCA’s ongoing review, more refunds may be issued over the coming year — so taking action now ensures you’re not left behind.