Updated: 26 August 2026

Originally Published: 29 March 2025

Quick answer

If you used Honda finance to buy a vehicle for personal use, your agreement may fall within the FCA's motor finance redress scheme if it meets the applicable criteria.

The position has changed significantly since this guide was last updated.

The FCA introduced its industry wide redress scheme on 30 March 2026 [1] for motor finance customers who were treated unfairly between 2007 and 2024. Legal challenges followed. The Upper Tribunal partially suspended elements of the scheme in July 2026 [2].

The entire scheme has not been suspended. Firms must continue complying with rules that remain in force. However, lenders are not currently required to calculate or pay compensation under the suspended elements while the legal process continues.

The Upper Tribunal will hear the challenges either between 14 and 18 December 2026 or between 16 and 26 February 2027.

For anyone considering a Honda finance claim or Honda car finance claim, this means there is currently no reliable individual compensation date. Consumers can still complain while the proceedings continue.

Honda finance in 2026: what has changed since April?

When the previous version of this guide was published, the FCA had just introduced its final motor finance redress scheme.

At that point, millions of claims were expected to be settled during 2026. The regulatory position has since changed considerably.

• 30 March 2026: The FCA introduced its industry wide motor finance consumer redress scheme.
• April 2026: The previous version of this Honda guide was published.
• April and May 2026: Legal challenges were brought against elements of the FCA scheme.
• 31 May 2026: The general motor finance complaint handling pause ended.
• 1 July 2026: The Upper Tribunal ordered a partial suspension of elements of the scheme.
• August 2026: Firms can continue work permitted under rules that remain in force, but compensation calculations and payments under suspended provisions remain affected.
• 14 to 18 December 2026 or 16 to 26 February 2027: The Upper Tribunal will hear the legal challenges during one of these periods.

The legal proceedings have disrupted earlier expectations around payouts 2026. If the scheme is upheld and the judgment is not appealed, the FCA now expects payments under the scheme to begin in 2027.

Why Honda finance agreements are being looked at

The issue is not the Honda vehicle itself.

The focus is on how historic motor finance was arranged.

For many customers, PCP car finance or another form of Honda finance was arranged through a dealership. The customer chose a vehicle, discussed the deposit and monthly repayments, reviewed the finance terms and entered into the agreement.

Behind that transaction could be a separate commercial arrangement between the lender and the dealer or broker.

A commission payment alone does not prove car finance mis-selling.

The FCA scheme focuses on specified commission and commercial arrangements and whether the circumstances meet its requirements for redress.

For a potential Honda finance claim, relevant questions can include whether commission was payable, whether a discretionary commission arrangement existed, whether the commission met the relevant high commission threshold and whether there was a qualifying tied arrangement.

This is why the wider car finance scandal cannot be reduced to the fact that a dealer received commission.

Nor does having an expensive finance agreement automatically establish mis-sold car finance.

The circumstances behind the agreement matter.

What types of finance arrangement could matter?

The FCA's final scheme identifies three broad types of arrangement that can be relevant.

Discretionary commission arrangements

A discretionary commission arrangement, commonly known as a DCA, allowed a broker or dealer discretion over the customer's interest rate in a way that could affect the commission received.

This created a potential financial incentive connected with the rate offered to the customer.

The FCA banned DCAs in motor finance in 2021 [3].

For historic Honda claims, the relevant question is not simply whether commission existed. The agreement and circumstances must meet the applicable FCA rules.

High commission arrangements

Certain high commission arrangements can also be relevant.

Under the final FCA rules, the high commission test involves commission representing at least 39% of the total charge for credit and 10% of the amount of credit [4].

This means the scheme is not limited to agreements involving a DCA.

Meeting the high commission threshold does not automatically establish entitlement to car finance compensation. The other requirements of the scheme still apply.

Tied arrangements

Certain contractual relationships between lenders and brokers can also be relevant.

A tied arrangement can involve a broker being required to introduce customers exclusively to one lender or give that lender the first opportunity to provide finance.

This is more specific than simply remembering that a Honda dealership presented one finance option.

Limited choice does not by itself establish car finance mis selling. The underlying arrangement and other FCA requirements still need to be considered.

Could you have a Honda finance claim?

Having Honda finance does not automatically mean compensation is due.

A Honda finance claim needs to fall within the scope of the FCA scheme and satisfy the applicable criteria. Relevant factors include the agreement itself, whether commission was payable by the lender to a broker and whether a relevant commission or tied arrangement existed.

An agreement does not necessarily become irrelevant because:

• the finance has been repaid
• you settled the agreement early
• you sold or traded in the vehicle
• you no longer have the original paperwork

Equally, a high interest rate or large monthly repayment does not establish mis selling on its own.

A Honda car finance claim should therefore be considered against the actual agreement rather than assumptions based on the vehicle, interest rate or amount paid.

When might a Honda finance agreement be ineligible?

Not every historic Honda agreement will fall within the scheme.

An agreement may be outside its scope where it does not meet the FCA's definition of a scheme case or another applicable condition is not satisfied.

The rules contain requirements and exclusions covering matters such as the date and type of agreement, commission arrangements and whether a relevant arrangement existed.

Simply knowing that a dealer received commission does not establish eligibility. Using dealer arranged finance does not automatically mean an agreement was unfair either.

Eligibility depends on the individual agreement and the applicable FCA rules rather than the Honda name alone.

What about Honda PCP claims?

PCP car finance can fall within the FCA scheme, but having a PCP agreement does not itself establish that anything went wrong.

Personal Contract Purchase describes the finance product. The FCA scheme instead focuses on how the agreement was arranged and whether it meets the relevant conditions for redress.

For Honda PCP claims, the assessment therefore centres on the individual agreement.

A Honda finance PCP claim may be relevant where the agreement falls within the scope of the scheme and satisfies the applicable criteria. The same principle applies to wider PCP finance claims and PCP car claims.

This distinction matters for anyone concerned about mis sold PCP car finance. A dealership recommending PCP does not by itself establish mis selling.

A PCP claim also does not automatically result in a full PCP refund. If an agreement qualifies for redress, compensation is determined according to the methodology applicable to that agreement.

What does the partial suspension mean for Honda customers?

The position changed on 1 July 2026, when the Upper Tribunal ordered a partial suspension of elements of the FCA's motor finance redress scheme. The FCA announced the effect of the order on 2 July.

The entire scheme has not been suspended.

Firms must continue complying with provisions that remain in force. They can continue preparing for the scheme and progressing complaints as far as the rules permit.

However, lenders are not currently required to calculate or pay compensation under the suspended elements while the legal proceedings continue.

For someone considering a Honda car finance claim, the practical point is that parts of the redress process have been delayed. Consumers can still raise concerns with their lender.

Who is challenging the FCA car finance scheme?

Four parties are challenging elements of the FCA's 2026 motor finance redress scheme [5]:

• CA Auto Finance UK Limited
• Consumer Voice Limited
• Mercedes Benz Financial Services UK Limited
• Volkswagen Financial Services UK Limited

Honda is not one of the four challengers identified by the FCA.

The proceedings concern elements of the wider FCA car finance scheme. Their outcome could therefore affect agreements involving firms beyond those bringing the challenges.

When will the Upper Tribunal hear the challenges?

The Upper Tribunal will hear the challenges either between 14 and 18 December 2026 or between 16 and 26 February 2027.

Which period applies depends on whether those involved seek further expert opinion or disclosure and whether any such application succeeds.

A judgment is expected in the months following the hearing.

If the scheme is upheld and the judgment is not appealed, the FCA expects payments under the scheme to begin in 2027. If it is overturned in whole or in part, the FCA will need to decide what happens next.

What happened to payouts 2026?

When the FCA introduced the scheme in March 2026, it expected millions of claims to be settled during 2026.

The subsequent legal challenges changed that timetable.

Under the partial suspension, firms are not currently required to calculate or pay compensation under the suspended provisions. Information about payouts 2026 published before the July suspension may therefore no longer reflect the current position.

There is currently no reliable individual payment date for an affected Honda finance claim.

How could Honda compensation work?

There is no standard amount of Honda compensation.

Across the wider motor finance scheme, the FCA's central estimate is approximately £829 in redress per eligible agreement [6]. This is a market wide estimate rather than a Honda specific figure or prediction of what an individual customer could receive.

The amount of car finance compensation depends on the agreement and the redress methodology that applies.

Terms such as car finance refund and PCP refund should therefore not be interpreted as meaning every successful customer will receive all their finance payments back.

Likewise, making a PCP compensation claim does not establish how much compensation will ultimately be due.

How to find an older Honda finance agreement

Not having the original paperwork does not necessarily prevent you from identifying an older agreement.

Useful places to check include:

• old Honda finance correspondence
• emails from the dealership or finance provider
• bank statements showing finance repayments
• vehicle purchase documents
• previous finance statements
• the vehicle registration number
• credit records from TransUnion, Experian or Equifax

Credit reports can sometimes help identify historic borrowing, but older or closed accounts may no longer appear.

If you locate an older agreement, check the lender name, agreement date and finance type. These details provide a better starting point for assessing a potential Honda finance claim than relying solely on how you remember the dealership describing the finance.

What is a car finance refund check?

A car finance refund check can help establish basic information about an older agreement, such as the lender, approximate agreement date and finance product.

A PCP claim check can serve a similar purpose where PCP finance was involved.

Neither confirms car finance mis selling or guarantees compensation. The purpose is to identify the agreement so its circumstances can be assessed against the applicable rules.

What are your options while the legal process continues?

Consumers can still raise concerns about historic motor finance while the Upper Tribunal proceedings continue.

Contact the lender directly

You can complain directly to the relevant lender without professional representation.

The FCA scheme is free for consumers to use.

Seek independent legal advice

Some consumers choose independent legal advice where their circumstances raise questions beyond the standard FCA scheme.

Fees and funding arrangements vary and should be checked before instructing a solicitor.

Use a regulated claims management company

Some consumers choose an FCA regulated claims management company to help identify historic agreements or manage their claim.

Reclaim247 is an FCA regulated claims management company that supports consumers with car finance claims. Depending on the service used, fees may apply if compensation is recovered.

Using Reclaim247 or another finance claims expert is optional. It does not change the FCA's eligibility criteria. Consumers can also complain directly to their lender for free.

Frequently asked questions

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

Potentially. An agreement does not automatically fall outside the FCA scheme because the finance has been repaid, settled early or the vehicle is no longer owned.

Eligibility depends on whether the historic agreement meets the applicable FCA requirements.

Does every Honda PCP agreement qualify?

No. Having PCP car finance does not automatically mean an agreement qualifies for redress.

For Honda PCP claims, the relevant question is how the finance was arranged and whether the agreement meets the FCA scheme criteria. PCP is a type of finance. It is not itself evidence of mis selling.

Do I need my original Honda finance paperwork?

Not necessarily.

Old emails, bank statements, dealership documents and finance correspondence may help identify an agreement.

Credit records from TransUnion, Experian or Equifax may also contain useful information, although older or closed accounts may no longer appear.

Can I complain while the FCA scheme is partially suspended?

Yes.

The entire scheme has not been suspended. The Upper Tribunal order affects specified elements, including requirements relating to calculating and paying redress. Firms must continue complying with provisions that remain in force.

How much could Honda compensation be?

There is no standard amount of Honda compensation.

The FCA's central market wide estimate is approximately £829 in redress per eligible agreement. Any individual compensation will depend on the agreement and the applicable redress methodology.

What is a PCP claim check?

A PCP claim check can help identify an agreement and establish basic information needed to assess whether it may be relevant.

It does not confirm that an agreement was mis sold or guarantee a refund.

Do I need professional help with a Honda finance claim?

No. Consumers can complain directly to their lender and use the FCA scheme for free.

Some people choose a solicitor or regulated claims management company for support. This is optional and does not change the FCA's eligibility criteria.

Your Honda matters less than how the finance was arranged

The wider car finance scandal is not about Honda vehicles themselves or an assumption that every finance agreement was unfair. The regulatory focus is on how historic motor finance was arranged.

For someone considering a Honda car finance claim, the individual agreement is the starting point. Identifying the lender, finance type and circumstances in which the agreement was arranged can help establish whether it may fall within the FCA scheme.

The legal challenges have delayed elements of the redress process, but consumers can still raise concerns with their lender. The Upper Tribunal proceedings will determine what happens next for the suspended parts of the scheme.

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References:

1. The FCA introduced its industry wide redress scheme on 30 March 2026 - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. The Upper Tribunal partially suspended elements of the scheme in July 2026 - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended
3. The FCA banned DCAs in motor finance in 2021 - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models
4. Under the final FCA rules, the high commission test involves commission representing at least 39% of the total charge for credit and 10% of the amount of credit - https://handbook.fca.org.uk/handbook/conred5/conred5s1
5. Four parties are challenging elements of the FCA's 2026 motor finance redress scheme - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
6. the FCA's central estimate is approximately £829 in redress per eligible agreement - https://www.fca.org.uk/publication/policy/ps26-3.pdf