PCP Car Finance Commission Complaints: Do You Have a Claim in 2026?
The car finance commission mis-selling issue explained for 2026 — what discretionary commission arrangements were, who might be owed money, and how to check and complain.
Quick answer
For years, some car finance deals — particularly PCP (Personal Contract Purchase) and hire purchase agreements — allowed the dealer or broker arranging the finance to set the interest rate within a range set by the lender, earning higher commission the higher the rate charged to the customer. This discretionary commission model created an obvious conflict of interest and was banned by the Financial Conduct Authority from January 2021, but the question of redress for people who took out affected agreements before the ban has continued to develop through regulatory and court processes into 2026.
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Car finance calculatorWhy this mattered
Under a discretionary commission arrangement, the broker or dealer had a direct financial incentive to negotiate a higher interest rate for the customer than the minimum the lender would have accepted, since their own commission rose with the rate. Customers were rarely told clearly that the person arranging their finance stood to earn more by charging them a higher rate — which is the heart of the mis-selling concern that led to the ban and the subsequent look-back at historical agreements.
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Hire purchase calculatorChecking if an old agreement is affected
Anyone who took out car finance — particularly PCP or hire purchase — before January 2021 and is unsure whether a discretionary commission arrangement applied should start by contacting the lender directly (the finance company named on the agreement, not necessarily the dealership) and asking specifically about the commission structure used. Many lenders have already been proactively writing to potentially affected customers as part of industry-wide reviews, so checking any recent post or email correspondence from a former finance provider is also worthwhile.
Making a complaint without paying a fee
A complaint can be raised directly with the lender at no cost. If it isn't resolved satisfactorily, it can be escalated to the Financial Ombudsman Service, which is also free to use. Claims management companies actively market their services in this area, but using one is entirely optional and typically means surrendering a percentage of any compensation awarded as a fee — money that isn't necessary to spend given the free complaint routes available.
Deadlines are moving, so check current guidance
Because this issue has involved evolving regulatory guidance and court rulings, any specific deadline for complaints or a formal redress scheme should be checked against the latest FCA position rather than relied on from an older news article, since the process and timelines have been subject to change as the wider legal position has developed.
Bottom line
If a PCP or hire purchase car finance deal was taken out before 2021, it costs nothing to ask the lender directly whether a discretionary commission arrangement applied — and there's no need to pay a claims company for something that can be pursued for free through the lender and, if necessary, the Financial Ombudsman Service.
Sources
- Financial Conduct Authority: Motor finance discretionary commission arrangements
- Financial Ombudsman Service: Car finance complaints
Frequently asked questions
What was the discretionary commission arrangement issue in car finance?
Before being banned by the FCA in January 2021, some car finance deals let the dealer or broker set the interest rate within a range, earning a higher commission the higher the rate charged to the customer — creating an incentive to charge more than necessary without the customer's knowledge.
Am I likely to be owed money if I took out car finance before 2021?
It depends on whether the specific deal involved a discretionary commission arrangement and whether it wasn't adequately disclosed; not every pre-2021 PCP or hire purchase agreement is affected, and eligibility depends on the individual lender's arrangements and the outcome of the wider regulatory and court process.
How do I check if my old car finance agreement is affected?
The starting point is contacting the finance provider (or broker/dealer) directly to ask whether a discretionary commission arrangement applied to the specific agreement, and checking any correspondence from the lender about a review, since many lenders have been proactively writing to affected customers.
Do I need to pay a claims management company to make a complaint?
No — a complaint can be made directly to the lender for free, and if unresolved, escalated to the Financial Ombudsman Service at no cost; using a claims management company is optional and typically means giving up a percentage of any redress as a fee.
Is there a deadline for making a car finance commission complaint?
Regulatory time limits and any redress scheme deadlines have been affected by ongoing FCA and court processes, so checking the current FCA guidance for the latest position on deadlines is essential rather than assuming an old complaint automatically remains open indefinitely.
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