Drivers across the UK will have an established route to have their complaints investigated, following a nearly two-year hiatus, as the Financial Conduct Authority (FCA) has confirmed it will resume handling car finance claims from 31 May 2026 [1]. The FCA had originally planned to restart the process at the end of July [2], but bringing the date forward shows a push to give people quicker answers, especially those who may have been affected by mis-sold car finance deals.

The pause, which was first announced in January 2024, has been put in place to allow the Financial Conduct Authority to investigate increasing concerns about the way commission was being added to car finance agreements, most commonly personal contract purchase (PCP) deals. There had been a high volume of complaints around so-called discretionary commission arrangements. These gave brokers the ability to set interest rates themselves, with higher rates often meaning they earned more commission. The issue was that many drivers had no idea this was happening when they agreed to their finance deals. They were not told that the interest rate could be influenced by how much commission a broker might earn. As more people started looking into their agreements and asking whether they had been treated fairly, the complaints grew. What started as individual concerns soon turned into a national conversation, putting a spotlight on the way some areas of the motor finance industry had been working behind the scenes.

Why the FCA Paused Complaints

The car finance scandal began gaining attention when it became clear that some finance agreements may have been structured in ways that disadvantaged the customer. At the heart of many complaints are claims that drivers were charged more than they should have been due to hidden commission structures.

To determine the extent of the issue and if mass redress is appropriate, the FCA paused the eight-week time period within which a firm must usually respond to a complaint. The regulator used this period to gather evidence, consult with stakeholders and form a redress plan. Moving the end date forward now gives firms the chance to work through the complaints in time to meet the wider regulatory timeframe.

The pause only affects specific types of car finance claims relating to PCP agreements, which involve discretionary commission. Not all motor finance complaints are included in the review.

Motor Leasing Complaints Resume First

The FCA has clarified that leasing complaints will not be included in the proposed compensation scheme [3]. This means firms must resume issuing final responses to leasing-related complaints from 5 December 2025, following normal complaint-handling rules.

Unlike regulated finance agreements, leasing agreements do not involve the same commission structures under review. Consumers with leasing complaints should expect responses in line with standard timelines, well before the broader pause ends for PCP claims.

Billions in Potential Compensation

The FCA’s review could lead to a redress scheme worth up to £11 billion [4]. If finalised, this would represent one of the largest compensation efforts in UK consumer finance. The scheme would cover PCP claims where drivers were not made fully aware of how interest rates were set or how brokers benefited financially.

These PCP arrangements are becoming increasingly popular with UK drivers trying to save on a new car. But few knew that interest rates could be manipulated by commission arrangements to force higher repayments.

If firms resume complaint handling in May 2026, they will have to review all eligible car finance claims including those submitted during the suspension within the eight-week response window.

What Drivers Can Do Now

If you think you were mis-sold car finance, now is a good time to check whether you might be eligible to make a complaint. This could apply if you took out a personal contract purchase (PCP) agreement through a dealer or broker, were not clearly told about how commission worked, or suspect you ended up paying more than you should have.

To get ready, it helps to gather any paperwork related to your finance agreement. This might include your contract, payment records, emails, or letters from your lender. Having this information organised can make things easier once the complaint process officially resumes.

There are also free tools available online that can help you quickly check whether your car finance claim might be valid. Taking a few minutes now could save you time later when the process reopens in May 2026.

What Happens Next

We expect to receive the finalised FCA redress scheme in early 2026. This will further detail how car finance complaints should be assessed and how any redress should be calculated. This will, of course, give lenders and customers a clear set of steps to follow once the final details are confirmed. This should make the process simpler and more transparent for everyone as complaints begin moving forward again.

With the handling of car finance claims due to restart on 31 May 2026, consumers finally have a timeline for progressing their complaints. The next phase of the FCA’s work is expected to bring more clarity to drivers who feel they were not treated fairly and help rebuild trust across the motor finance market.

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References:

1. the Financial Conduct Authority (FCA) has confirmed it will resume handling car finance claims from 31 May 2026 - https://www.fca.org.uk/news/statements/pause-motor-finance-complaints-handling-lift-31-may-2026
2. The FCA had originally planned to restart the process at the end of July - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
3. The FCA has clarified that leasing complaints will not be included in the proposed compensation scheme - https://www.fca.org.uk/publications/policy-statements/ps25-18-changes-handling-rules-motor-finance-complaints
4. The FCA’s review could lead to a redress scheme worth up to £11 billion - https://www.fca.org.uk/publication/corporate/motor-finance-consultation-analyst-briefing.pdf