Updated: 4 May 2026
Originally Published: 23 March 2025
Why MotoNovo is now at the centre of car finance claims
MotoNovo is no longer just one of many lenders in the UK car finance market.
In 2026, it has become one of the clearest examples of how the car finance scandal has moved from isolated complaints to a full industry-wide issue.
If you are searching:
- is MotoNovo finance refunding
- did MotoNovo overcharge
- did MotoNovo use discretionary commission
You are not alone. These are now some of the most common questions drivers are asking.
What makes MotoNovo different is what has happened behind the scenes.
MotoNovo is part of FirstRand. In April 2026, FirstRand said it plans to exit the UK motor finance market following the cost to the bank of the FCA compensation scheme [1].
That’s important.
It shows that this is not just a regulatory review. It is a structural shift affecting how lenders operate.
For customers, it means one thing.
Your agreement is now part of a much larger review process.
What happened with MotoNovo and the car finance scandal
The key to understanding a MotoNovo finance refund is to know how agreements were initially set up.
MotoNovo were like most lenders in that they worked via dealers.
It seemed simple enough:
- pick a car
- dealer sorts finance
- you sign up to monthly repayments
But behind that simplicity, pricing could be more flexible than it appeared.
In many cases:
- lenders provided a range of interest rates
- dealers could influence which rate was offered
- higher rates could increase commission
- this was not always clearly explained
This is where car finance mis-selling becomes relevant.
It is not about whether you could afford the payments.
It is about whether you were given enough information to understand how the agreement worked.
Did MotoNovo use discretionary commission?
Yes. Like many lenders, MotoNovo operated within a system that included discretionary commission arrangements.
This does not automatically mean every agreement was unfair.
However, it does mean:
- pricing could vary between customers
- dealer incentives may have influenced outcomes
- transparency was not always consistent
The FCA scheme considers all of these factors.
You don't have to prove any of this.
The review process looks at:
- whether commission existed
- whether it affected the interest rate
- whether it was explained clearly
The legal background behind MotoNovo claims
Before the FCA introduced its redress scheme, car finance disputes were already moving through the courts.
Two developments were particularly important.
First, the Court of Appeal expanded how lenders could be held responsible for dealer behaviour.
Second, the Supreme Court narrowed some of those arguments, but confirmed that claims could still proceed where there was an unfair relationship.
This shifted the focus.
Instead of relying on complex legal arguments, the issue became simpler:
Was the agreement fair, and was it properly explained?
The FCA stepped in to answer that question at scale.
The FCA car finance redress scheme explained
In March 2026, the FCA introduced a formal scheme to handle car finance claims across the industry.
Scheme covers:
- agreements entered into between 2007 and 2024
- customers who could have been treated unfairly
- all major lenders, including MotoNovo
Some key figures give an idea of the scale:
- some 12.1 million agreements in scope [2]
- compensation pot estimated at £7.5 billion [3]
- average payout is around £829 per agreement [4]
This matters because it changes how claims are handled.
Instead of individual disputes, agreements are reviewed using a consistent framework.
MotoNovo provisions and what they tell us
MotoNovo’s parent company has already taken financial action in response to the scheme.
FirstRand has set aside around £750 million to cover potential compensation [5].
That number is not about individual claims.
It reflects:
- expected claim volume
- potential exposure across agreements
- the scale of the issue within MotoNovo’s portfolio
It also explains why the company is stepping away from the UK market.
For customers, this provides context.
It shows that the issue is not isolated. It is systemic.
How MotoNovo finance refund amounts are calculated
A MotoNovo finance refund is not a fixed amount.
It is calculated based on financial impact.
The FCA compares:
- what you actually paid
- what a fair agreement may have looked like
- the difference between the two
Compensation may include:
- excess interest
- commission-related overpayment
- interest added to refunds
- adjustments where relevant
This approach ensures that compensation reflects real outcomes, not averages.
Types of car finance mis-selling linked to MotoNovo
The FCA scheme does not treat all claims the same. It focuses on specific patterns of unfairness that affected how agreements were priced and presented.
Understanding these helps answer questions like:
- did MotoNovo overcharge
- did MotoNovo use discretionary commission
- is a MotoNovo finance refund likely
Discretionary commission arrangements (DCA)
This is the most significant category across the car finance scandal.
Under a DCA:
- the lender provided a range of interest rates
- the dealer selected the rate offered to the customer
- higher rates could result in higher commission
Many customers were not told this.
Instead, the rate was often presented as fixed or based on credit profile alone.
It’s significant because even a small increase in the interest rate could:
- add to monthly repayments
- increase the overall cost of the loan
- result in a long term financial loss
Average compensation: around £810
This category accounts for the majority of mis-sold car finance Motonovo claims.
Contractual tie or restricted lender choice
These cases are less obvious, but still important.
They involve situations where:
- the dealer had a preferred or exclusive relationship with a lender
- the customer was not shown alternative options
- the agreement was presented as the only or best choice
The issue here is not just commission.
It is whether the customer had a genuine opportunity to compare.
Average compensation: around £807
These cases often depend on how clearly the sales process was explained.
High commission cases
This category involves unusually high commission levels.
The FCA defines this as:
- commission at least 39% of the total cost of credit
- and at least 10% of the amount borrowed
These are less common but more impactful.
They suggest a stronger imbalance in how the agreement was structured.
Average compensation: around £1,200 or more
These cases often result in the highest car finance compensation outcomes.
Why PCP claims are a major part of MotoNovo refunds
Many MotoNovo agreements are PCP claims.
PCP deals are structured differently from standard loans.
They include:
- lower monthly payments
- a final balloon payment
- assumptions about future vehicle value
Because of this:
- pricing differences can have a larger long-term effect
- total cost is less visible at the start
That is why PCP refund claims are so common.
How the FCA scheme works in practice
The FCA redress scheme applies to agreements between 2007 and 2024, but it does not treat all agreements equally.
Instead, it divides them into two time-based groups.
Scheme 1. Older agreements
- Covers 6 April 2007 to 31 March 2014
- Often includes older PCP and hire purchase deals
- May involve incomplete or harder-to-access records
Average compensation: around £734
These claims may take longer to process because:
- documentation may be limited
- systems have changed over time
- additional verification may be required
Scheme 2. More recent agreements
- Covers 1 April 2014 to 1 November 2024
- Includes more standardised finance agreements
- Typically easier to review
Average compensation: around £881
These claims are expected to move faster because:
- records are more accessible
- processes are more consistent
- data is easier to verify
Overall average across both schemes
£829 per agreement
This is the figure most often quoted when people ask:
- how much are people getting back
- how much will I get back from MotoNovo
Payout timelines and what to expect
There is no single payout date.
However, based on the FCA framework:
- payouts 2026 are expected as claims begin processing
- most claims are expected to be resolved by 2027
- some cases may take longer depending on complexity
Timing depends on:
- which scheme your agreement falls under
- the type of mis-selling involved
- how many claims are being processed at the same time
Key deadline
31 August 2027: This is the current deadline to submit a car finance claim under the FCA scheme.
Starting earlier does not guarantee a faster payout, but it helps ensure your claim is included in the process.
Should you use a finance claims expert?
You do not need one.
But they can help if:
- you cannot find my car finance agreements
- you have multiple agreements
- you want help managing the process
They do not increase compensation.
They reduce complexity.
How to find old car finance agreements
If you need to find my car finance agreements, start with:
- bank statements
- email records
- dealership paperwork
- credit reports
A car finance refund check through a CMC or finance claims expert can also help locate agreements.
Frequently Asked Questions
Is MotoNovo finance refunding customers?
Not automatically.
MotoNovo finance refunds are only issued where an agreement meets the FCA’s criteria for unfairness. This means your agreement must show that you were financially disadvantaged, for example through undisclosed commission or pricing that was not properly explained.
The scheme provides a structured way to assess this, but you still need to take action to have your agreement reviewed.
Did MotoNovo overcharge customers?
In some cases, yes.
Overcharging can occur where the interest rate was influenced by commission and this was not clearly disclosed. However, not all agreements were affected.
Each case is assessed individually to determine whether there was a measurable financial impact.
Did MotoNovo use discretionary commission?
Yes.
MotoNovo operated within a system that allowed discretionary commission in the past. This is one of the main areas being reviewed under the FCA scheme.
You do not need to confirm this yourself. The lender assesses this as part of the claims process.
How much compensation could I receive?
There is no fixed amount.
Average payouts are around £829, but actual outcomes depend on:
- the size of your agreement
- the interest rate applied
- the type of mis-selling involved
- the length of the agreement
Some claims may be lower, while others, particularly high commission cases, may be higher.
Can I still claim if my agreement has ended?
Yes.
You can still make a car finance claim even if:
- the agreement has ended
- the vehicle has been sold
- the finance was settled early
The FCA scheme focuses on how the agreement was structured at the time it was taken out.
Do all PCP claims qualify?
No.
Not all PCP claims will result in compensation. Each agreement is assessed individually to determine whether it meets FCA criteria.
PCP agreements are more complex, which is why they are often reviewed closely, but they are not automatically eligible.
How do I find my old MotoNovo agreement?
If you need to find my car finance agreements, start with:
- bank statements
- email confirmations
- dealership paperwork
- credit reports from Experian, Equifax, or TransUnion
If records are incomplete, a car finance refund check through a CMC or finance claims expert can often help identify the agreement.
What this means for MotoNovo customers in 2026
MotoNovo is one of the clearest examples of how the car finance scandal has moved into a resolution phase.
The key change is not just that compensation exists.
There is now a defined way to assess agreements.
The FCA scheme removes much of the uncertainty that existed before. It replaces individual disputes with a structured process that applies consistent rules across the market.
That does not mean every MotoNovo agreement was unfair.
It means every agreement can now be reviewed properly.
For many customers, the biggest shift is perspective.
What once felt like a completed purchase is now something that can be reassessed in detail.
The pricing, the commission, and the structure of the agreement are no longer hidden.
They are part of a defined review process.
What to do next
You do not need to reach a conclusion immediately.
The most practical next step is simple.
Start with a car finance refund check.
This can be done directly or with the support of a finance claims expert or claims management company.
From there:
- confirm whether your agreement may fall within the FCA scheme
- understand how it was structured
- decide whether to proceed with a claim
You do not need full documentation to begin.
You do not need certainty.
You just need to take the first step and understand where you stand.
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References:
- In April 2026, FirstRand said it plans to exit the UK motor finance market following the cost to the bank of the FCA compensation scheme - https://www.autofinancenews.net/allposts/risk-management/firstrand-to-exit-uk-as-car-loan-charges-hit-750m/?ki-cf-botcl=1
- some 12.1 million agreements in scope - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- compensation pot estimated at £7.5 billion - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- average payout is around £829 per agreement - https://www.dailymail.co.uk/money/cars/article-15691403/FCA-says-12MILLION-829-payouts-car-finance-compensation.html
- FirstRand has set aside around £750 million to cover potential compensation - https://www.theguardian.com/business/2026/apr/08/close-brothers-shares-surge-uk-bank-comfortably-absorb-car-finance-compensation