Most successful PCP and HP claims now focus on whether your finance agreement created an “unfair relationship” under Section 140A of the Consumer Credit Act 1974. The UK Supreme Court confirmed this in August 2025, and the FCA has said that unfair commission models were widespread.
You may have a valid claim if:
- Your agreement included a discretionary commission arrangement (DCA): Dealers could raise your interest rate to earn more commission for themselves. This practice, often hidden from customers, was banned in 2021.
- Commissions were not properly disclosed: Even where fixed commissions were used, many borrowers were not told that brokers were being paid, meaning you may still have overpaid.
- Key information was unclear or missing: For example, if the finance product’s costs, risks, or final balloon payment weren’t properly explained.
- Affordability checks were inadequate: If the lender failed to assess whether you could reasonably meet the repayments, the agreement may be considered unfair.
The FCA estimates that 95% of car finance agreements included some form of commission, and around 40% involved banned DCAs. That means millions of motorists could be owed a refund.
If you’re unsure whether your agreement qualifies, you can:
- Check your paperwork for interest rates or references to “broker commission” (though these were often hidden).
- Make a complaint directly to your lender for free, or use a regulated claims management company to help you.
If your complaint is rejected, you can escalate it to the Financial Ombudsman Service.
