Updated: 16 October 2025

Originally Published: 15 March 2025

The UK car finance industry has been criticised. Drivers have discovered loans (BMW car finance included) have had hidden commissions attached to them, or have included higher interest rates than they were led to believe, or could understand.

As a result, the Financial Conduct Authority (FCA) is holding a consultation on a national redress schemethe Financial Conduct Authority (FCA) is holding a consultation on a national redress scheme [1]. The consultation (ends 18 November 2025) states how the payments would be calculated and who would be eligible for them. Based on the FCA’s modelling, the scheme has the potential to return up to £8.2 billion across the market, with the typical payment being around £700 per eligible agreementtypical payment being around £700 per eligible agreement [2]. This is an estimate for the whole market, not a guarantee for any single BMW finance claim.

If you took out a BMW on Personal Contract Purchase (PCP), Hire Purchase (HP) or another regulated credit agreement between 6 April 2007 and 1 November 2024, this guide explains what is changing, how to recognise signs of BMW mis-sold finance, and how to make a BMW car finance claim safely and confidently.

Why BMW car finance customers are making claims

For years, BMW Financial Services offered convenient ways to spread the cost of a car. Many customers felt the packages were simple and competitive. In some cases, though, the finance included commission structures that were not explained in a meaningful way.

At the centre are dealer commissions. Lenders often pay a commission to the dealership for arranging the finance. Many customers were never told how those commissions worked, or that the commission could influence the interest rate offered. That lack of transparency has led to a rise in BMW car finance claims from customers who believe they paid more than they should have.

Common signs of BMW finance mis-selling

• Your interest rate felt high for your credit profile and was not properly explained
• No one clearly told you that the dealer earned a BMW finance commission
• Balloon payments or end-of-term charges were mentioned briefly, or not at all
• Extra fees or add-ons appeared on the agreement without clear consent

If any of these sound familiar, your agreement could qualify for BMW car finance compensation.

The FCA investigation and the 2025 redress scheme

The FCA reviewed millions of motor finance agreements and concluded that many created unfair relationships between customers, lenders and brokers. To deliver consistent outcomes at scale, the regulator opened an official consultation in October 2025 for agreements made between April 2007 and November 2024.

The consultation highlights three types of unfair arrangements that can make an agreement eligible. These apply across the market and may be relevant to BMW finance claimBMW finance claim [3].

1) Discretionary Commission Arrangements (DCAs)

Before 2021, some dealers could move the interest rate up or down. Their commission increased if the rate went up. Customers were rarely told this in a way that helped them make an informed choice. If your BMW PCP or HP agreement was set up before 2021 and your rate looked high for your credit standing, a BMW finance discretionary commission arrangement may have been involved.

2) High commission arrangements

Some agreements paid unusually large commissions to the broker. The FCA defines “high” as 35 per cent or more of the total cost of credit and 10 per cent or more of the loan amount. Even where commissions were mentioned in passing, very large payments can still lead to unfair outcomes. If a high commission influenced the product you were sold, you may have grounds for a BMW compensation claim.

3) Exclusive or restricted lender relationships

In some cases, a broker had exclusive or near-exclusive access to a single lender. That limited your choice and may have blocked better options elsewhere. If your BMW dealership only offered finance from one lender without explaining alternatives, the agreement could fall into this category.

The Supreme Court ruling in August 2025

In August 2025, the Supreme Court confirmed that commissions are not automatically unlawful [4]. However, if a commission was hidden or excessive, the finance can still be unfair under the Consumer Credit Act 1974. This ruling gave the FCA confidence to proceed with a structured scheme. For BMW finance customers, it means that a contract can look valid on paper yet still be mis-sold if essential information was not shared in a clear and meaningful way.

How the FCA’s redress scheme would work

The FCA proposes a hybrid calculation that looks at both the commission paid and the interest you are estimated to have overpaid because of that commission. This aims to reflect the real-world impact on the customer, not just the size of the commission itself.

What to expect, at a market-wide level:

• Typical compensation around £700 per eligible agreement
• Serious cases may receive full commission recovery plus interest, where commissions were very high and the legal tests are met
• Overall scale up to £8.2 billion in total redress across as many as 14 million agreements
• Your outcome will depend on your individual contract, loan size, rate and circumstances. A BMW finance settlement is not guaranteed and the final amount can be higher or lower than the market average.

Complaint handling and key dates

To deliver consistent decisions once the scheme starts, the FCA has aligned timelines for firms and consumers.

• 4 November 2025: Deadline for comments on extending complaint handling periods
• 18 November 2025: Consultation closes for feedback on the redress scheme
• 4 December 2025: FCA confirms whether to extend complaint deadlines [5]
• 31 July 2026: Proposed deadline for firms to issue final responses on motor finance complaints
• Early 2026: Final rules and policy statement expected
• Later in 2026: Compensation payments expected to begin

You can still submit a BMW finance claim now. It will be logged and can be assessed under the scheme once the rules are final. Acting now does not speed up payment, but it does ensure your case is ready.

How to check whether your BMW finance was mis-sold

It can be hard to know at a glance. These questions will help you spot red flags before you complete a BMW Financial Services claim.

Did anyone explain commission clearly?

If you only saw a vague line such as “a commission may be paid”, that may not have been enough for an informed choice.

Was your rate higher than expected?

A high rate despite a good credit score can be a sign that a discretionary commission affected the pricing.

Were fees or add-ons unclear?

Hidden admin fees, poorly explained balloon payments or early settlement charges can all point to unfair terms.

Were you offered real choice?

If every quote came from a single lender without alternatives or a proper comparison, an exclusive broker–lender setup may have limited your options.

If two or more of these apply, you may have a BMW car finance claim.

Step by step: how to make a BMW finance claim

You can do this yourself or ask for help. Either way, the process is similar.

Step 1. Request your documents

Ask BMW Financial Services for your finance agreement, pre-contract information and any commission disclosures. They should be able to provide copies.

Step 2. Check for red flags

Look for references to commission, unusual rate changes, fees you do not recognise, and how the balloon payment was explained.

Step 3. Complete a BMW finance claim form

Explain, in simple terms, why you believe the finance was mis-sold. For example, hidden commission, inflated interest, or lack of choice. Attach copies of your documents.

Step 4. Submit your claim

Send your BMW finance claim form by email, post, or through BMW’s website. Keep copies of everything.

Step 5. Wait for a response

Firms normally have eight weeks to respond. For commission-related cases, the industry is working to the FCA timetable, which means most outcomes will follow once the scheme rules are finalised.

Step 6. If you disagree with the outcome

Ask for an internal review. You can also escalate your case to the Financial Ombudsman Service within six months of the final response, or seek support from a regulated claims management company or solicitor.

What a BMW finance settlement can include

If your BMW finance PCP claim or HP claim is upheld, redress may include:

• Refund of overpaid interest
• Repayment of undisclosed commission
• Refund of unfair fees or charges
• Simple interest on any refund, typically at the Bank of England base rate plus one percentage point
• Correction of credit file entries linked to the mis-sold finance

The FCA’s modelling suggests an average of around £700 per agreement, although the figure can be higher or lower based on the loan size, term and the details of your case.

DIY, solicitor, or claims management company

You have three main routes. Choose the one that suits your time, confidence and paperwork.

Do it yourself

• Best for: simple, recent agreements
• Cost: Free
• Good to know: You gather evidence, write the complaint, track deadlines and respond to the lender yourself

Solicitor

• Best for: Complex or defended cases
• Cost: Often a percentage of redress, sometimes with additional legal costs
• Good to know: Regulated by the Solicitors Regulation Authority, can advise if litigation becomes necessary

Claims management company

• Best for: Most standard BMW finance claims where you want end-to-end support
• Cost: Typically 18 to 36 per cent including VAT, no win no fee
• Good to know: Authorised by the FCA, can trace documents, prepare your BMW financial services claim, and manage contact with the lender and the Ombudsman

Choosing expert help does not guarantee success. It can, however, reduce stress, keep your paperwork in order, and make sure your BMW finance refund request is complete and ready for review.

Key facts at a glance

• Covered period: 6 April 2007 to 1 November 2024
• Who is affected: PCP, HP and other regulated BMW car finance agreements
• Mis-selling categories: Discretionary Commission Arrangements, High Commission Arrangements, Exclusive or restricted broker–lender relationships
• Estimated market redress: up to £8.2 billion
• Typical payment: around £700 per eligible agreement, case by case
• Scheme timing: final rules expected early 2026, payments later in 2026

Frequently Asked Questions

Can I make a BMW finance claim now?

Yes. You can submit your complaint today. It will be logged and can be assessed once the FCA rules are in place.

Does this only apply to BMW PCP deals?

No. The scheme covers PCP, HP and other regulated BMW car finance agreements made in the covered period.

How much compensation might I receive?

The FCA’s modelling indicates a typical payment around £700 per agreement across the market. Your outcome depends on your agreement and circumstances.

Do I need to pay anything upfront to a claims company?

No win no fee is common. Regulated firms usually charge 18 to 36 per cent including VAT of any redress received. Always check the terms.

Can I claim if my agreement has ended?

Yes, as long as it falls within the covered dates and meets the eligibility criteria.

Who regulates claims management companies?

The Financial Conduct Authority. Always check a firm’s authorisation before you engage them.

Final thoughts

The proposed FCA scheme is designed to bring consistent outcomes to a complex problem. It recognises the three key issues that drove many BMW finance claims: rates influenced by discretionary commission, high commission that distorted advice, and restricted lender relationships that limited choice.

If you used BMW car finance between 2007 and 2024, it is worth checking your paperwork and considering whether any of these issues apply. You can raise your complaint directly with BMW Financial Services, handle it yourself with the Ombudsman if needed, or ask a regulated claims management company to prepare everything for you.

No one can promise a result, and figures will vary case by case. Taking a calm, informed approach now will make sure your BMW finance claim is ready when the FCA final rules are published in 2026.

_________

References:

1. the Financial Conduct Authority (FCA) is holding a consultation on a national redress scheme - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
2. typical payment being around £700 per eligible agreement - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme
3. BMW finance claims - https://www.fca.org.uk/consumers/car-finance-complaints
4. In August 2025, the Supreme Court confirmed that commissions are not automatically unlawful - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf

4 December 2025: FCA confirms whether to extend complaint deadlines - https://www.fca.org.uk/news/statements/extension-motor-finance-complaint-handling-pause-confirmed