Updated: 27 October 2025

Originally Published: 29 March 2025

If you used Honda Finance to buy your car, you are not alone in taking a closer look at that agreement in 2025. The Financial Conduct Authority has opened a national consultation to fix unfair lending across the market. That has encouraged many drivers to ask simple questions. Was my interest rate fair? Did the dealership earn a commission that I was not told about? Were the key parts of my PCP explained in a way I could understand?

In this guide, you will see what has changed this year, how to spot a Honda mis-sold agreement, and how to start a Honda car finance claim with confidence. We will also cover typical redress outcomes, the official timelines, and how to use a regulated finance claims expert if you want support. Average outcomes across the market are expected to be around £700 per eligible agreement, but the figure for your case can be higher or lower depending on your own contract and evidence.

Why many drivers are reviewing old Honda loans

For years, forecourt finance made life simple. You picked a car, the dealership arranged a PCP or hire purchase plan, and you drove away the same day. The price felt manageable because the monthly payment was lower than a personal loan. What sat behind the deal was not always clear.

Before 2021, some dealers could influence the interest rate on your agreement. If they set a higher rate, they often earned a larger payment from the lender. This is known as a discretionary commission. Most customers were not told how that incentive worked or how it could affect the cost of credit. The FCA later banned this model for new business. Older agreements are now under review to check fairness.

That is why you will see more Honda claims in the news. People are not chasing windfalls. They want a fair review of what they paid and why. If poor disclosure or very high commissions pushed the cost up, a Honda finance claim is a reasonable step.

What changed in 2025

A few clear milestones matter for people thinking about a Honda car finance claim.

Supreme Court clarity

In August 2025 the Supreme Court confirmed that commissions are not automatically illegal [1]. If a commission was hidden, excessive, or influential enough to change what you paid, the loan can still be unfair. That means many Honda PCP claims will continue to be valid where disclosure was weak and costs were affected.

FCA consultation

In October 2025 the FCA opened a six-week consultation to design a national redress scheme covering regulated PCP and hire purchase agreements from 6 April 2007 to 1 November 2024 [2]. The aim is simple. One clear process. Consistent decisions. Less confusion for consumers and firms.

Complaint handling timeline

Lenders are not required to issue final responses on commission-related complaints until 4 December 2025 [3]. The FCA has also proposed a sector-wide deadline of 31 July 2026 for final responses once rules are set. These dates are there to keep outcomes fair and consistent across the market. Payments are expected to begin later in 2026 once the framework is running.

The FCA’s three types of unfair agreement

Your Honda finance claim may fit one or more of these categories. The labels come from the FCA consultation and apply to all lenders.

Discretionary commission arrangements

A broker or dealer could vary your rate and earn more when the rate went up. Most customers were not told this in a way they could understand.

High commission structures

Even where the rate did not change, some commissions were so large that they risked distorting the sale. The consultation highlights levels such as 35 percent or more of the total cost of credit and 10 percent or more of the loan amount.

Restricted lender access

Some brokers mainly offered credit from a single lender and did not make that clear. If you were led to believe there was only one option, or alternatives were not explained, that can be unfair.

If any of these apply, you may be eligible for Honda compensation once the process is in place.

Simple signs your agreement might have been mis-sold

You do not need to be a finance specialist to spot red flags. Many people discover issues just by re-reading their paperwork with fresh eyes.

• The APR felt high for your credit profile and no clear reason was given.
• No one explained that the dealer or broker could earn a commission.
• The balloon payment on your PCP was not made clear at the start.
• Admin fees, early settlement charges, or option to purchase costs were not set out in plain English.
• You were encouraged to sign the same day, without time to compare options.
• You were told there was only one finance route available.

If several points ring true, a Honda finance PCP claim is worth starting. You can do this yourself for free, or with help if you prefer.

Who may qualify for a Honda car finance refund

You could be eligible for Honda car finance compensation if the following feel familiar.

• The agreement was made between 6 April 2007 and 1 November 2024.
• The dealership or broker did not clearly disclose commission.
• The interest rate appeared higher than expected without a good explanation.
• PCP terms such as the balloon payment and mileage limits were not explained in a way you could follow.
• The overall circumstances created an unfair relationship under the Consumer Credit Act.

Redress normally targets the extra interest you paid because of the commission model, plus the undisclosed commission itself in more serious cases. Many outcomes also add interest on the refund at the Bank of England base rate plus one percentage point. When appropriate, unfair credit markers can be corrected.

Average outcomes across the market are expected to be around £700 per eligible agreement [4]. That is an estimate, not a promise. Your figure depends on your documents, your rate, the commission structure, and your usage over the term.

How refunds are likely to be calculated

The FCA is proposing a hybrid model. In plain English, reviewers will look at two things. The commission that was paid, and the interest you overpaid because of how that commission worked. The method that gives you the higher fair outcome will be used.

• Typical outcomes. Around £700 per eligible agreement is the current market-wide estimate.
• Severe cases. Where high commission is shown, proposals include returning the full amount with interest.
• Other elements. A Honda car finance settlement can also adjust fees that were not explained properly and add interest on the redress.

Remember, every file is different. A small city car on a short PCP may lead to a modest refund. Long multi-year Honda PCP claims on higher value vehicles can be larger.

Step by step: how to start a Honda car finance claim

You can submit a Honda car finance claim online, send a letter or email, or phone and then follow up in writing. The structure below keeps your complaint clear and complete.

Step 1. Gather your documents

Look for your signed agreement, the pre-contract information, any showroom quotes, emails, texts, and payment statements. If paperwork is missing, ask the lender or broker for copies. Include your agreement number if you have it.

Step 2. Sense-check the numbers

Write down the APR, the total amount repayable, the term, and any fees you can see. If this was a PCP, note the balloon payment, the mileage limit, and the excess mileage rate. Compare these figures with what you remember being promised.

Step 3. Explain what went wrong

Keep it short and factual. For example.

• I was not told that the dealer’s commission increased when my interest rate increased.
• The balloon payment on my PCP was not explained in a way I could understand.
• I was told only one lender was available and I was not given a chance to compare alternatives.

Say what you want to happen. A fair review in line with FCA policy. A Honda car finance refund of overpaid interest and any undisclosed commission where applicable. Interest on redress. Correction of unfair credit markers.

Step 4. Send the complaint

Use email, post, or the online form. Keep copies of everything and note the date sent. A simple timeline will help if you later speak to the Financial Ombudsman Service.

Step 5. Wait for the process to move

Normally, firms have eight weeks to issue a final response. Commission-related final responses are paused until 4 December 2025. Sending your complaint now simply ensures your case is logged and ready for review when that date passes.

Step 6. Escalate if you disagree

If you are unhappy with the outcome or do not receive one once the pause lifts, you can refer the case to the Financial Ombudsman Service within six months of the final response. The Ombudsman is free and independent. It can instruct a lender to pay redress if it upholds your complaint.

Should you use professional help for your Honda finance claim

You can handle a Honda finance claim yourself from start to finish. Many people do. Some prefer to work with a regulated finance claims expert because they have limited time, missing paperwork, or simply want help expressing their case.

A regulated claims management company or a solicitor can help you:

• Review your agreement and spot signs relevant to Honda PCP claims.
• Prepare a structured complaint with clear evidence.
• Manage the back-and-forth with the lender and the Ombudsman.

Fees are usually charged only if you receive Honda compensation, often between 18 and 36 percent including VAT. If you appoint a firm, make sure it is authorised and regulated by the FCA, and read the client agreement carefully so you know what you will pay and when. Using a representative does not increase eligibility. It is simply an option for convenience.

Practical tips for a stronger complaint

• Use clear headings so a reviewer can follow your story. Agreement details, what happened, why it mattered, what you want.
• Include dates, names, and short call notes where you can.
• Attach copies of statements, settlement quotes, and emails.
• If your case relates to a PCP, say so. It can help route the complaint to the right team for a Honda finance PCP claim review.
• Keep your tone calm and factual. That will always help the person reading your file.
• If you have already paid the agreement off and only kept a Honda car finance settlement letter, include it. If all you have is a bank statement showing payments, include that. It is common to begin with partial records. You can add more as the review progresses.

Key timeline for Honda cases

• August 2025. Supreme Court confirms that hidden or excessive commission can make a loan unfair.
• October 2025. FCA opens a six-week consultation on a national redress scheme.
• 18 November 2025. Consultation window closes.
• 4 December 2025. Pause on commission-related final responses ends.
• Early 2026. FCA expects to publish final rules and confirm calculation methods.
• 31 July 2026. Proposed deadline for lenders to issue final responses.
• Late 2026. Honda compensation payments expected to begin once the scheme is running.

Filing your complaint now means your Honda car finance claim will be in the queue and ready to be assessed once the framework is live.

Frequently Asked Questions

Can I make a Honda finance claim now?

Yes. You can submit a complaint today. Final responses on commission-related issues are paused until December 2025, but logging your case now ensures it is ready to be reviewed.

Does the consultation apply to PCP and HP?

Yes. Both PCP and hire purchase agreements fall within the scope of the consultation. If your case relates to PCP, make that clear. It helps with Honda PCP claims routing.

How much might I receive?

The market-wide estimate is around £700 per eligible agreement. Some Honda claims will be higher where commission was significant. Others will be lower. Nothing is guaranteed.

Can I complain if the loan has ended?

Yes. Finished agreements can still qualify if they fall within the consultation dates. A settlement letter or final statement is useful evidence.

Do I need to use a representative?

No. You can complain for free. The Financial Ombudsman Service is also free. A representative is only needed if you want help gathering evidence or writing the complaint.

What is the difference between a refund and compensation?

A Honda car finance refund usually refers to the return of undisclosed commission and the interest that flowed from it. Honda compensation may also include statutory interest on the redress and correction of any unfair credit markers.

I only have a settlement figure and not the full agreement. Can I still claim?

Yes. Send what you have and ask the lender for copies of the original documents. Most firms can supply what is needed to review your case.

Compliance and clarity

• Refunds are not guaranteed and always depend on individual circumstances.
• Average figures are market estimates, not entitlements.
• You can complain for free directly to the lender or through the Ombudsman.
• If you use a third party, make sure it is FCA-regulated and that fees are clear before you sign.
• Final FCA rules are expected in 2026 and may adjust parts of the process.

Final thoughts

Car buying should feel straightforward. For many people, the finance part did not. Hidden incentives and unclear explanations left some customers paying more than they should. The FCA’s consultation is the path to a consistent fix. It gives a clear way to check fairness and, where appropriate, to put money back in people’s pockets.

If your agreement involved discretionary commission, a very high commission structure, or limited access to alternatives, you have a fair reason to ask for a review. Start by gathering your documents. Write a simple, honest account of what happened and why it mattered. If you want support, a regulated helper can organise the evidence and manage the process for you.

Whether you go it alone or work with a professional, a well-prepared Honda finance PCP claim gives the decision maker what they need to assess your position properly. If your first attempt is not successful, the Ombudsman route is there to take a fresh look. The goal is the same for everyone. A fair Honda compensation outcome that reflects what you should have paid under a transparent agreement, and a better experience for future borrowers who deserve clear information from day one.

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References:

1. In August 2025 the Supreme Court confirmed that commissions are not automatically illegal - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
2. In October 2025 the FCA opened a six-week consultation to design a national redress scheme covering regulated PCP and hire purchase agreements from 6 April 2007 to 1 November 2024 - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
3. Lenders are not required to issue final responses on commission-related complaints until 4 December 2025 - https://www.fca.org.uk/news/statements/extension-motor-finance-complaint-handling-pause-confirmed
4. Average outcomes across the market are expected to be around £700 per eligible agreement - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme