Updated: 08 September 2025

Originally Published: 07 December 2024

Blue Motor Finance stands out as a top UK auto finance company because of its technology-driven lending approach, quick loan approval processes, and high acceptance rates. However, the car financing giant, which has served over 250,000 customers in the UK, is now experiencing a bad rep, for its alleged unfair practices, due to its involvement in the Blue Motor Finance discretionary commission scandal.

This practice, which is now banned by the DCA, has been among the most controversial issues in the car finance space, as this presented financial challenges for many consumers, including customers of Blue Motor Finance. If you acquired financing through Blue Motor Finance, then you may be eligible for a Blue Motor Finance claim.

In this guide, we’ll dive deeper into eligibility and how you can claim a Blue Motor Finance refund. 

Blue Motor Finance and Its Role in Car Finance Agreements

Operating in the UK since 2005, Blue Motor has grown to become one of the leading providers of motor finance, serving customers and working with dealerships all over the country, both for used and new Blue Motor finance cars. Alongside its tenure is the group’s popularity as a technology-driven car financing solution, which leads to an extensive lending portfolio and commitment to innovation and compliance within the automotive finance industry.

Blue Motor Finance has lent £2.5 billion in financing since it started [1], and no doubt, it is among the country’s leading car finance companies. Focusing relentlessly on innovation and risk management, the company adheres to the highest standards of regulatory compliance, setting it apart in the industry. They also offer high acceptance rates to various risk profiles and robust support with their technology and service teams. 

However, despite all these, Blue Motor is no exception to the ongoing car finance auto-loan scandal, with Blue Motor Discretionary Commission at the centre. 

What did the FCA reveal about Blue Motor Finance?

Alongside huge lenders like Santander, Black Horse, and Close Brothers, Blue Motor Finance is also implicated for its use of Discretionary Commission Arrangements (DCAs), where dealers and brokers are authorised to increase the interest rates on car finance agreements, depending on how they deem it fitting to their interests. The bigger the interest rate set per agreement, the bigger the commission they get to take home for themselves. 

While this has favoured many dealers and lenders in the past, they are now put under scrutiny, with the Financial Conduct Authority (FCA) ruling this practice unfair and unlawful. In part of this ruling, FCA imposed a ban on discretionary commission arrangements since January 2021 [2], which caused many customers to pay excessively due to inflated interest rates.

Here are the key aspects of Blue Motor Finance’s involvement in the Blue Motor Finance DCAs:

1. Broker Authority on Interest Rate – With DCAs, it is the broker’s discretion to decide how much interest they will put on car finance deals, which are financed by Blue Motor. However, brokers abused this ability, augmenting the interest rates so it also translates to higher earnings on their end. While this benefits dealers, this is at the expense of consumers, most of whom aren’t aware that the elevated interest rates are brought about by undisclosed commissions.  
2. Lack of Transparency – Most customers aren’t aware that there are commissions embedded within their finance agreements, especially before it was banned in 2021 when Blue Motor finance complaints started coming in. This non-disclosure led to overpayments, as borrowers were not fully informed of how much their loans cost, considering all the commissions topped up through the increment on interest rates. 
3. Regulatory Actions and Legal Developments – The FCA’s ban on DCAs in 2021 was the body’s direct response to these unfair practices that were infamous to dealerships and lenders around the UK. More Blue Motor customers became aware of DCAs and how they affected thousands of car finance agreements, brought about by subsequent rulings and landmark decisions issued on the car finance scandal. 

Why Are Customers Filing Blue Motor Finance Claims?

Many customers are filing claims against Blue Motor Finance for its unfair and misleading lending practices, which were shed into light upon FCA’s investigation. Due to the overwhelming number of claims raised against motor financing companies, the FCA reviewed the car finance industry exposing the widespread issue of using the Discretionary Commission Arrangement.  This approach has not only compromised the financial situation of consumers who had to pay more to cover the hidden costs but also cast questions on the integrity of lenders and dealers.

Let us clarify more the cause of this significant rise in Blue Motor Finance Claims and what it signifies for customers. 

1. Brokers increased interest rates to boost their commission which resulted in higher interest rates for consumers. 

Since lenders allowed dealers to set out interest rates, this created malice amongst dealers’ obligation to put the customer’s best interest first. Brokers intentionally inflated the interest rate, which caused monthly fees to increase as well, as this meant increasing their commissions too. Because of this unfair practice, customers are overcharged with higher interest rates thinking that this interest is based on their creditworthiness and not the broker’s financial incentives. With this, hikes became arbitrary, siding with the dealer’s benefits. 

1. Customers were not informed about how much commission the dealer was getting, which meant they weren’t aware of how much they were truly paying. 

The unfair commission structures were kept under wraps from the consumers. Rather than being presented with transparent pricing, lenders and brokers did not disclose how much commission was added to the consumer’s loans. There was no information on the financial incentives that dealers received from hiking the interest. What was supposed to be an efficient and cost-effective financing option for consumers became an avenue to charge more from customers, as brokers prioritised their profits over giving customers the best deals. While customers are thinking they are getting the best deals, dealers and lenders are enjoying the sums of their unfair practice. 

1. The commission-driven pricing model became problematic.

As there was no transparency in the pricing model, thousands of borrowers were left paying significantly more over the life of their car loans than they should have. The FCA also found out that customers who may have qualified for lower rates weren’t given the opportunity to access them, as dealers intentionally hiked the rates, taking advantage of the power they had over the interest. 

Also, with the commission-driven pricing model, dealers were encouraged to find ways to close the deal even without the customer’s full knowledge of what they’re getting themselves into. Commission became a driving force for brokers to encourage customers on deals that they may not afford in the long run, resulting in a larger case of mis-selling. 

In light of the Blue Motor Finance news regarding payouts and Blue Motor Finance compensations to numerous lenders’ mis-selling tactics, thousands of customers are also seeking Blue Motor Finance refunds for overpaid interest and undisclosed commissions.

As FCA continues to shed light on this information, an increasing number of Blue Motor Finance customers are now:

• Requesting a breakdown of their loan terms
• Thoroughly reviewing agreements
• Filing compensation claims to recover the money they were overcharged
• Taking complaints to the Financial Ombudsman Service (FOS), if Blue Motor Finance fails to provide a refund

2025 Updates 

2025 has seen several major changes to car finance claims, including Blue Motor Finance mis-sold claims.

• Supreme Court ruling (August 2025) [3]: The court ruled that commissions are not automatically illegal but hidden or inflated discretionary commissions can still create an “unfair relationship” under consumer credit law. This means that many Blue Motor Finance commission claims could still be valid.
• FCA complaint pause [4]: The FCA has extended the pause on commission related complaints until 4 December 2025. This means you can still make your Blue Motor Finance claim today, but most cases will not be able to progress until after this date.
• Redress scheme consultation [5]: The FCA will publish a consultation in October 2025 to outline the details of a UK-wide redress scheme. The consultation is expected to last around six weeks with final redress rules not expected until early 2026. This means that it is now unlikely that we will see any redress payments until later in 2026.

With the latest updates on UK car finance claims in 2025, Blue Motor Finance customers can make claims to get back money they may have overpaid through unfair lending.

Who Can Claim a Refund from Blue Motor Finance?

If you’re a customer of Blue Motor Finance and specifically availed a product related to car financing such as Personal Contract Purchase (PCP) or Hire Purchase Agreement (HP), then there’s a possibility you have been mis-sold and are eligible for a claim. In the recent investigation by the FCA, it appeared that there were many borrowers who were overcharged due to undisclosed commissions and inflated interest rates. To know if you qualify for a claim, check for these common signs of mis-selling.

1. You Were Not Told About Broker Commissions

The most common issue involved in the Blue Motor mis-sold finance is the lack of transparency between dealers and buyers on broker commissions. If your broker has earned commission from your agreement without informing you, then chances are they also manipulated the interest rates to boost their earnings, making the pricing unfairly structured. If you weren’t informed about the commissions, then you may have been mis-sold. 

2. Your Interest Rate Was Higher Than Expected

As soon as issues on DCAs started to pile in, so did customers discovering the higher interest they were charged for no reason. Apparently, most customers qualified for lower rates, but since there was a commission, brokers intentionally hiked the interest, inflating their commissions as well. If you believe you were charged excessively high interest, then you should check and compare it with the interest rates other lenders have to assess if you’ve been charged higher than you should be.

3. There wasn't any cost breakdown

In car financing, lenders are required to clearly outline all the fees, charges, interest rates and commissions included to ensure there is transparent pricing. As a buyer, you should be able to determine the costs involved in the credit you’re taking out. Clear pricing information allows you to make an informed decision on whether this purchase is what fits you best. If there is no clear pricing, then signing the agreement should not be done too. 

4. You Were Pressured into Taking a Specific Deal

If the broker or dealer is too insistent on making you sign the finance agreement right away, without giving you options or letting you decide on your timeline, this can indicate a mis-selling potential. The dealer has no right to rush you into a contract. In addition, they must also ensure that you fully understand the terms and all the relevant details in your agreement to avoid dubbing the act as mis-selling. 

5. You Didn’t Fully Understand the Loan Terms

Were you clearly informed on how the loan worked, how the interests were calculated, and how much extra you will have to pay over time depending on penalties and the end option you prefer, especially on PCP agreements? Everything about the loan should be well-communicated to you, as no detail is too small to be left behind especially with money on the line. You’ll be paying either way, so there’s no reason for you not to ask properly what the loan entails.

6. You Took Out Finance Between 2007 and 2021

FCA has reviewed car finance agreements between 2007 and January 2021, so if you took out a loan on those dates, then you may be eligible for compensation as there’s a higher chance you were affected. This is the timeline when the DCAs were banned. 

How Are Blue Motor Finance Refunds Calculated?

Customers mis-sold a car finance agreement by Blue Motor Finance can be entitled to a refund or compensation. This is to cover the extra costs that were unwillingly paid brought about by inflated interest rates and undisclosed commissions. However, there’s no exact amount or range on how much you can get, as every contract will vary, and there are several factors that are put into play. There are many cases where thousands of pounds were refunded, as borrowers were also charged excessive interest on the duration of their loans. 

The average award you can expect to receive if you had been mis-sold a Blue Motor Finance PCP agreement will likely depend on the term of the contract and the features of that contract. The FCA guidance suggested a 'typical' discretionary commission claim could expect to receive an average payout of around £950 per agreement [6]. The award in each case will of course depend on the facts of each agreement. For some, pursuing a Blue Motor claim may only be a small refund, while for others, it could be several thousand pounds in compensation.

Here are the several factors considered when calculating how much refund you can get:

1. Overpaid Interest: Recovering the Excess Charges

The rate of how much excessive interest was charged on you will determine how much refund will be given or returned by your lender. The Blue Motor Finance issue is mainly about the discretionary commission model which allowed dealers to charge higher interest rates, even when the customer was qualified for lower rates. Since in this practice, borrowers paid more interest than they should have, a refund will entail the difference between the interest rate you were charged and what you should have been offered instead to rectify the results of the unfair practice. 

Say, you financed a car for £15,000 at an 11% interest rate and later discovered you are eligible for a 7% rate, then the excess 4% interest you paid will be returned, and often this could amount to hundreds or even thousands of pounds, given that these are calculated over the life of your loan. If the loan took three years, then that would be 36 months of 4% interest, so imagine how hefty that refund can be.

2. Reimbursing Commission and Exposing Hidden Fees 

One thing you have to consider as well, is how much money you can reimburse or refund. This is not the interest, but rather, the base rate from which the interest was charged.  During the FCA investigation, it was found that borrowers are rarely informed about how much commission was added to their loan, which is unfair on the end of the borrower. 

What makes this an unfair practice is that the commission is often built into the total loan cost, so as a customer, you are paying extra on top of the interest charges, without actually knowing it. Commission can also impact the pricing, and if this wasn’t disclosed to you, then you could be entitled to a full refund of that amount. Hence if the commission charged was different from what you were informed about, then the difference can also be refunded. 

The amount of the refund depends on how much commission was added. There are cases where brokers took commissions as high as 50% of the total interest paid, and while they have initially enjoyed this sum, lenders will be required to refund this substantial portion of the loan repayment upon a successful claim. 

3. Additional Financial Losses: Compensation for Unfair Agreements

The compensation you get isn’t limited to just that of the interest and commission itself. You are also allowed to file complaints and claims for any financial loss you incurred during the term, brought about by Blue Motor Finance’s mis-selling. 

• Extra fees, resulting from the high cost loan, like payback fees and penalties from the late payment of interest charges.
• Negative financial impact, which the high-interest loan caused you. If there were missed payments that damaged your credit score, then you can also ask for compensation for this. 
• Compensation for distress and inconvenience. Mis-sold agreements can lead to financial hardship, which can be both stressful and annoying. You can include in your claim the amount you are asking for this damage. 

There are cases where full loan write-offs and additional compensation payments are awarded to affected customers. However this isn’t the case for all. You should also be able to prove you were financially distressed from the mis-selling. 

Refunds for mis-sold car finance agreements will be decided on a case-by-case basis. If you suspect you have a Blue Motor Finance mis-sold case, then you should start to review your loan agreement and take action to reclaim what you were initially owed. 

How to File a Claim Against Blue Motor Finance

Upon confirmation that you were mis-sold an agreement by Blue Motor Finance, then it also means you are eligible to file a complaint and request a refund for any unfair charges, overpaid interest or hidden commissions charged to you. Since the FCA discovered that lenders are partnering with dealers in charging inflated interest rates, thousands of customers started filing claims to recover the amount overpaid to them.

Filing a claim is simple if you know all the right steps. If right now, you’re still unsure, simply follow each step closely to increase and improve your chances of getting a successful refund. Here, we’ll navigate the step-by-step guide on filing a claim to aid you toward a successful refund. 

Step 1: Request a Full Loan Breakdown

Always consider collecting all the relevant details that are about your finance agreement, such as a list of the bills associated or a loan breakdown, so you know what the interest, principal amount and other charges involved are. It will contain the following:

• Your Finance Agreement. The full copy of your contract is important as it will serve as the blueprint of your entire transaction. 
• What was the interest rate you were charged, and how was it calculated? Interest rates are common on financing agreements, but what you have to determine is whether it was on a fair scale, and how it was computed. 
• Any commissions paid to brokers and dealers as part of the loan
• Any additional fees in your contract

You should also be aware that the information you’re requesting is necessary and since under UK law, finance providers are required to disclose this, you won’t have problems securing a copy. Should Blue Motor Finance fail to provide you with a clear and transparent breakdown of all these, then don’t worry as it will only strengthen your mis-selling case even more. Transparency is required in all financial agreements.

Thus, to request a loan breakdown from your car financing, or in this case, Blue Motor Finance, you can:

• Send an email to the Blue Motor Finance customer service team. 
• Call the support line and formally request a copy of your agreement.
• Send a letter asking for full disclosure of the commission payment and loan terms of your contract. 

Step 2: Submit a Formal Complaint to Blue Motor Finance

You have to gather all the required papers and details about your agreement to formally register your complaint against Blue Motor Finance. A structured complaint letter will help your case. Therefore, you should be more forceful yet polite, brief yet clear. Perfectly describe how you think you were misled, how it happened, and what effect it had on your side. Provide any pertinent supporting papers and always demand the correct sum of money to compensate for the damages you had to sustain. 

Step 3: Wait for Blue Motor Finance to send their response

To set your expectations, it may take weeks from submission day to get a response from Blue Motor Finance. It allows them to thoroughly check your claim, and prepare a response which can be: 

• Accept your claim – Here, it means they will offer you a refund or the compensation you demand
• Reject your Claim – This happens when they think that based on what you’ve submitted, there was no mis-selling that happened
• Offer partial compensation – Often, when the lender thinks whatever you are demanding is too much, then they will offer partial compensation instead, which is certainly lower than the amount you are expecting. 

Should they accept your complaint and offer a fair refund, you have all the options. You can settle and the claim will be simply closed and successful. But if you think the refund amount is too little and isn't fair, then you can still make an appeal and escalate the case to the Financial Ombudsman Service instead. 

Step 4: Escalate Your Claim to the Financial Ombudsman Service (FOS)

There are cases where even if Blue Motor Finance responds to your claim, it still isn’t enough based on what you believe you should be refunded for. In case you’re not satisfied with what you are offered, you can escalate the car finance claim to FOS, and ask for their assistance in making a successful claim. The FOS is a regulatory body that resolves disputes that arise between customers and financial companies and is also authorised to award compensation. Here’s a guide on how to escalate your claim to the FOS:

• Gather all important documents – This will include your finance agreement, Blue Motor Finance’s response, your complaint letter and any copy of the calculation that shows how much you were overpaid. 
• File a complaint with the FOS – Filing with the FOS can be done online, by phone, by post or through the website. 
• Wait for the FOS decision – After filing your claim, the ombudsman will then investigate your case and decide if Blue Motor Finance has truly acted unfairly, however, be reminded that it will take a while, brought about by the number of cases the FOS handles regularly.

The FOS decision is legally binding, so should the FOS rule in your favour, then Blue Motor Finance will automatically be required to issue a full refund which includes:

• Overpaid Interest
• Undisclosed Commissions
• Any additional Financial Losses

What to Include in Your Complaint

Your formal complaint should cover three key elements:

1. A Clear Explanation of How Your Loan Was Mis-Sold

Here, you will need to outline the issue of your mis-selling case, and how you were affected by it. It should include all the relevant information, such as how the agreement was presented to you, and what exact steps were missed out or intentionally cut out. Some of the most common mis-selling claims are brought about by:

• Undisclosed commission – If you are not informed that the broker you got earned a certain commission from your loan, then this could mean your loan was unfairly priced. 
• Inflated Interest Rates – Brokers can manipulate the interest rate for their own benefit, meaning you may be paying unnecessary interest. 
• Lack of transparency – If Blue Motor Finance or your broker is not able to tell what the interest rate is, or intentionally omits key details, then you can use this as grounds for a claim. 
• Unfair financial burden – You can also argue that the finance agreement isn’t in your best interest if you paid more than the due you expected because of these undisclosed commissions. 

Here you need to be specific about what happened, giving all the relevant details. See this sample of what you can include in your formal complaint:

"I was not informed that a commission was added to my loan, nor was I told that my broker had discretion over my interest rate. Had I known, I would have sought a more competitive financing option. As a result, I overpaid by [amount] in interest."

2. Supporting Evidence

You need a strong case; to do so, you will need as much documentation as possible. Having supporting documentation helps strengthen your case, emphasising how you were mis-sold. Useful evidence includes:

• A copy of your loan agreement – This will show the entirety of the agreement, and show if a commission fee was disclosed. 
• Written communication with Blue Motor Finance or the broker – You need to keep all threads and transaction receipts you had with your lender, as this can be crucial evidence when making a claim.  Emails, letters, or messages that indicate there was a lack of transparency.
• A comparison of interest rates –To ensure there was a significantly higher interest rate, you should be able to provide documentation of the market average cost, to prove there was discrepancy and unfairness in how you were charged. 
• Bank statements or payment records – This document will show how much extra fees and interest you paid over the course of your loan.

Even if you don’t have all of this evidence, you can still file a complaint. Blue Motor Finance is legally required to respond and provide relevant information from their records.

3. A Specific Request for Compensation

In your complaint, you should be clear about your demands so the lender will know how to meet you on the same page. Whether it be reimbursement or pay, just be clear about it. Usually, this might consist of:

• The complete refund of the overpayment interest is the discrepancy between what was charged to you and what you should have paid under the original and reasonable conditions you agreed upon.
• Reimbursement on the undisclosed commissions – If the broker received a commission from your agreement without disclosing it to you, then you can reimburse this total amount or commissions. 
• Compensation for financial distress – Apart from the reimbursement and refund, you can also claim fees for the undue financial hardship that occurred due to the mis-selling. 

If you’re wondering how to phrase this in a way that sounds professional, here’s an example: 

"I am formally requesting  a complete return of the overcharged interest on my loan as well as compensation for any concealed commissions. My calculations show I overpaid around [amount]. Blue Motor Finance should give me a breakdown of their computations so I can be compensated appropriately."

How to File Your Complaint

You may file your complaint to the Blue Motor Finance in several different methods, including:

• Through Email – Most financial organisations like email complaints as it is a simple method to monitor communication. Should you like to do it via email, simply search their website for Blue Motor Finance's official complaints email and direct your complaint to them. 
• Through Post – If you feel more comfortable sending out a hard copy, you can do it by creating a physical letter and addressing it to Blue Motor Finance’s official customer complaints department. Ensure that you do it via recorded delivery so you have proof of submission. Also, include all hard copies of your proof and evidence as it will be required to prove mis-selling has occurred.
• Through an Online Complaints Portal – Check if Blue Motor Finance has an online portal for submitting complaints, as they are prominent to be innovative in the tech space. If it has, then you can opt for this option, as you can guarantee a faster response here.
• Through Phone – The standard way is to call Blue Motor Finance on the phone through their customer service line to file a complaint. But always make sure you follow up with a written complaint to keep the submission official.  

How Long Does the Claims Process Take?

Resolving a claim will take weeks and even months for many cases, from the moment you submit your complaint. 

Meanwhile, the claims process, when escalated to the FOS, takes longer, about three to six months, and still depends on the case complexity and workload. While it naturally takes some time, successful claims may result in refunds worth thousands of pounds, so if you are amongst those affected by Blue Motor Finance’s discretionary commission practices, then you should be taking a step to recover compensation. 

Successful Blue Motor Finance Claims: Real-Life Refunds

Are customers winning compensation from Blue Motor Finance?

Yes. Many customers have successfully recovered overpaid money. Here’s a real-life case of successful Blue Motor Finance refunds.

Blue Motor Finance Successful Claim: (DRN-4812480) [7] - In 2018, Mr S. acquired a car under HP from Blue Motor Finance but complained he was given a deal which isn’t affordable to him. After settling the agreement in 2020, he raised the concern that the BMF (Blue Motor Finance) did not conduct affordability checks to correctly assess whether he could afford the loan. The cash price of the car was £16,084.58. After interest and charges were applied, the total amount repayable over 77 months was £23,257.69.

BMF’s approval of the lending caused Mr. S to struggle with his other financial commitments. After careful evaluation and investigation, the FOS decided to uphold the complaint, requiring BMF to refund any payment over the original price of the car plus the 8% annual interest that was collected as an overpayment. 

This case only highlights how important it is to assess the affordability of a loan and whether it suits the client; as if not, refunds and compensation will be collected. 

If you took out car finance through Blue Motor Finance and suspect you were overcharged, now is the time to act. Many customers are already claiming back significant sums, and you could too. What you should do is to check your finance agreement, gather all evidence, and submit a formal complaint to Blue Motor Finance as early as your discovery. 

Frequently Asked Questions 

Am I able to claim a refund from Blue Motor Finance?

If your Blue Motor Finance agreement was mis-sold because of hidden commissions or unfair lending practices, you may be entitled to claim a refund.

How long does a Blue Motor Finance claim take to process?

There is no set time on how long a Blue Motor Finance claim takes to be processed. The time frame will depend on each individual case and could be anything from a couple of weeks to several months if it is taken to the Financial Ombudsman.

Do I have to use a solicitor to make a Blue Motor Finance PCP claim?

While you are not required to use a solicitor for your Blue Motor Finance car PCP claim, it can help to greatly improve your chances of receiving the maximum amount of refund available. PCP claims can be highly technical and a legal team or a finance claims expert can support you if you are unfamiliar with the claims process.

What happens if Blue Motor Finance rejects my claim?

If Blue Motor Finance rejects your Blue Motor Finance claim, it can be taken further by escalating to the Financial Ombudsman. The Ombudsman is authorised to intervene and enforce a fair result, ensuring you receive any losses you are owed due to mis-selling.

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References:

1. Blue Motor Finance has lent £2.5 billion in financing since it started - https://bluemotorfinance.co.uk/AboutUs
2. FCA imposed a ban on discretionary commission arrangements since January 2021 - https://www.fca.org.uk/publication/consultation/cp24-15.pdf
3. Supreme Court ruling (August 2025) - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
4. FCA complaint pause - https://www.fca.org.uk/news/statements/firms-given-until-december-2025-respond-motor-finance-commission-complaints
5. Redress scheme consultation - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme
6. average payout of around £950 per agreement - https://www.theguardian.com/business/2025/aug/04/who-will-get-car-loan-payout-how-much-regulator
7. Blue Motor Finance Successful Claim: (DRN-4812480) - https://www.financial-ombudsman.org.uk/decision/DRN-4812480.pdf