Updated: 02 September 2025

Originally Published: 29 March 2025

Historically, drivers buying or leasing cars on Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements could use Honda Finance. Yet by 2025, evidence of mis-sold car finance has many customers wondering whether they paid more than they should have and whether Honda should compensate them.

Some Honda Finance agreements contained secret commissions and high interest rates, investigations found. Dealers hiked borrowing costs to drive up earnings, often without telling customers. Such practices are the heart of the UK car finance scandal and could mean thousands of drivers can make a Honda car finance claim.

Why Are Honda Finance Claims Increasing?

The use of discretionary commission arrangements (DCAs) has been under investigation by the Financial Conduct Authority (FCA). Under these models, car dealers were allowed to adjust interest rates on loans to increase their own commission. Most customers were never told about this hidden incentive.

The effect was clear: many people with Honda Finance PCP agreements were left paying higher monthly instalments than necessary.

In January 2021, the FCA banned DCAs for new agreements, recognising that they created conflicts of interest [1].

But for agreements taken out between 2007 and January 2021, the damage was already done. These older agreements remain at the centre of rising Honda PCP claims today.

Am I Eligible for a Honda Finance Claim?

You may be eligible to make a Honda finance PCP claim if:

• Commissions were withheld. Your dealer or broker received a commission and did not explain it to you, your agreement may have been mis-sold.
• Your interest rate was inflated. Suppose the dealer raised your rate to make more commission, you could get a refund.
• You were pressured to sign. Mis-selling is often characterised by high pressure sales techniques and unclear explanations.
• You were not offered alternatives. If all you got was one deal without fair comparison, that might be a mis-selling.
• You found hidden fees later. Hidden documentation fees, settlement fees or other costs strengthen your case.

If any of those apply, and you should investigate your right to a Honda car finance claim.

How Much Honda Compensation Could You Get?

The FCA estimates the average payout in discretionary commission cases will be around £950 per customer agreement [2]. But individual Honda claims can fetch much more than that, depending on the loan amount, the agreement term and any hidden fees.

Typical refund levels include:

• £500 to £2,000 - short-term agreements/small cars.
• £2,000 to £5,000 - common for multi-year Honda Finance PCP claims.
• £5,000+ - for long-term PCP or HP loans on higher-value cars.
• Additional hardship awards - extra compensation may be paid if mis-selling caused debt problems, stress, or credit damage.

Refunds may include:

• Repayment of overpaid interest
• Refund of hidden commissions
• Refund of unspecified fees or penalties.
• Awards for distress and inconvenience.

How to Make a Honda Finance Claim

Here’s the process if you want to challenge a mis-sold Honda Finance PCP or HP agreement:

• Gather documents. Collect your finance agreement, payment records, and any dealer or lender correspondence.
• Complain to Honda Finance. Explain why you think your agreement was mis-sold and provide proof.
• Escalate to the Financial Ombudsman Service (FOS). If your complaint is rejected, the Ombudsman can review your case independently.
• Await a decision. You may be eligible for a refund of overpaid interest, commission and fees if you are successful..

What Has Changed in 2025?

• Supreme Court decision (August 2025). The Court said commissions are not automatically unlawful [3]. Excessive or undeclared discretionary commissions can nevertheless create an "unfair relationship" under consumer credit law. That leaves many Honda finance claims alive.
• Consultation by FCA on redress. It will publish a consultation in October 2025 which will last for around six weeks [4]. It will consult on how a sector-wide redress scheme might work, with final rules due for adoption in early 2026. This will presumably include agreements made between 2007 and 2021, including many Honda Finance PCP claims.
• Pause on complaints. The FCA has extended the pause on commission-related complaints until 4 December 2025 [5]. Customers can still submit a Honda finance claim now, but most will not be processed until after the consultation and final rules.

Case Studies: Honda Claims in Practice

October 2024 – Court of Appeal (Original Ruling)

The Court of Appeal originally ruled that dealers, acting as brokers for lenders such as MotoNovo, had a fiduciary duty to customers [6]. It found that commissions had to be clearly disclosed and that hiding these details in small print was not sufficient. Refunds were ordered in cases where commissions were concealed, and this decision was initially seen as a major win for consumers.

August 2025 – Supreme Court Ruling (Revised Landscape)

The Supreme Court later overturned much of that position. It held that car dealers do not generally owe a duty of loyalty or fiduciary responsibility to customers in most finance transactions. However, it upheld a claim under the Consumer Credit Act where a particularly large and undisclosed commission created an “unfair relationship.” In practice, this means most commission arrangements are no longer automatically unlawful, but very high or concealed commissions may still be challenged successfully.

What the Ombudsman Data Shows

The Financial Ombudsman Service (FOS) has not published Honda-specific outcomes, but industry-wide figures show the scale of consumer concern [7]:

• 15,956 hire purchase (motor) complaints were logged in Q4 2024, more than triple the previous year.
• Overall motor finance complaints rose by 49% in the second half of 2024.
• For the full 2024/25 period, hire purchase (motor) was the most complained-about product, with 76,160 cases.

While not limited to Honda, many of these complaints involve the same commission issues found in Honda Finance agreements, showing how widespread the problem has become.

These rulings show that Honda compensation claims are being taken seriously by both regulators and the courts.

FAQs on Honda Finance Claims

Am I eligible for Honda compensation?

Yes. If you signed a Honda Finance PCP or HP agreement between 2007 and January 2021 and were not told about commissions, you could get a refund.

How much is the average Honda finance claim worth?

The FCA estimates the average payout is around £950, though some Honda PCP claims may be worth several thousand pounds.

Can I make a Honda car finance claim if my agreement has ended?

Yes. You can still make a Honda finance PCP claim even if your contract is up and you no longer own the car.

What if Honda Finance rejects my complaint?

You can escalate the case to the Financial Ombudsman Service, which has the power to order refunds.

Do I need a solicitor for a Honda finance claim?

Not necessarily. You can complain directly or use a regulated PCP claims company on a no win, no fee basis if you want support with the process.

Conclusion

Mis-selling through hidden or discretionary commissions has left thousands of drivers overpaying on their loans, with refunds expected to average around £950 per customer.

The FCA has paused complaint handling until December 2025, but its forthcoming consultation in October will pave the way for an industry-wide redress scheme beginning in 2026. In the meantime, it is sensible to gather your paperwork, understand your options, and prepare your case.

Whether you complain directly to Honda Finance, complain to the Financial Ombudsman Service or claim support from a regulated PCP claims company on a no-win, no-fee basis, you could receive significant compensation. The rise in Honda claims shows just how many customers were affected by concealed fees and undisclosed commissions. By knowing your rights and taking action, you can put yourself in the best position to receive the refund you may be owed.

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References:

1. In January 2021, the FCA banned DCAs for new agreements, recognising that they created conflicts of interest - https://www.fca.org.uk/publication/impact-assessments/ps-20-8-motor-finance-discretionary-commission-models-consumer-credit-commission-disclosure.pdf
2. FCA estimates the average payout in discretionary commission cases will be around £950 per customer agreement - https://www.theguardian.com/business/2025/aug/04/who-will-get-car-loan-payout-how-much-regulator
3. commissions are not automatically unlawful - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
4. consultation in October 2025 which will last for around six weeks - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme
5. FCA has extended the pause on commission-related complaints until 4 December 2025 - https://www.fca.org.uk/news/statements/extension-motor-finance-complaint-handling-pause-confirmed
6. Court of Appeal originally ruled that dealers, acting as brokers for lenders such as MotoNovo, had a fiduciary duty to customers - https://www.macfarlanes.com/what-we-think/102eli5/court-of-appeal-hands-down-decision-in-motor-finance-test-case-102jn76/
7. industry-wide figures show the scale of consumer concern - https://kpmg.com/xx/en/our-insights/regulatory-insights/motor-finance-case-landmark-ruling-made.html