Updated: 20 April 2026

Originally Published: 11 November 2024

Most PSA finance agreements did not feel unusual at the time.

You chose a car, agreed a monthly payment, and signed a finance agreement that seemed straightforward. There was no obvious indication that anything was wrong.

That is exactly why these agreements are now being reviewed.

The issue is not what customers saw. It is what sat behind the agreement, and how that influenced what you ultimately paid.

In 2026, the FCA car finance review has introduced a structured way to reassess these agreements, including those arranged through PSA Finance UK.

So the question is no longer whether your agreement was affordable.

It is whether it was structured fairly, and whether you may now be entitled to car finance compensation.

Why PSA finance agreements rarely raised concerns at the time

At the point of sale, PSA car finance was designed to feel simple.

Customers were typically shown:

• a fixed monthly payment
• a deposit amount
• a contract length

This made the agreement easy to understand and compare.

What was not always visible was how those numbers were created.

The dealership handled the process from start to finish. They introduced the finance, explained the options, and completed the agreement. In many cases, customers relied on that guidance without needing to question the detail.

This created a situation where the agreement felt clear, even if some of the underlying mechanics were not.

That is the gap now being examined.

Where PSA finance may not have been fully transparent

In many PSA finance claims or PSA finance PCP claims, the issue is not the agreement itself, but how it was explained.

Customers were not always told:

• that commission formed part of the deal
• that the interest rate could be adjusted within a range
• that higher rates could increase dealer commission
• whether alternative finance options were available

This is where PSA finance discretionary commission becomes relevant.

The dealer had flexibility in how the agreement was priced, and that flexibility could influence what the customer ultimately paid.

Most customers were unaware this was happening.

A simple example of how this could affect cost

To understand why this matters, it helps to look at a simple scenario.

Two customers take out similar PSA finance PCP agreements for comparable vehicles.

• Both agree similar deposits
• Both accept similar monthly payments
• Both sign their agreements on the same day

However, one agreement includes a slightly higher interest rate due to commission being applied differently.

Over time, that difference can result in one customer paying significantly more overall, even though the agreements appeared almost identical at the start.

This is the type of situation the FCA is now reviewing across millions of agreements.

What the FCA car finance scheme changes

Before 2026, raising a mis-sold car finance claim often meant navigating an unclear process.

Outcomes varied. Some complaints were upheld, while others were rejected with little consistency.

The FCA has now introduced a structured redress scheme.

This changes how PSA finance claims are handled:

• all agreements are assessed using the same criteria
• mis-selling is clearly defined
• compensation follows a consistent method
• timelines are set across the industry

This removes much of the uncertainty that previously existed.

The scale of the review

The FCA car finance scheme is one of the largest financial reviews in the UK.

• around 12.1 million agreements are being assessed [1]
• estimated compensation is £7.5 billion
• total costs exceed £9 billion

PSA finance claims form part of this wider review, which is why so many agreements are now being reconsidered and many are checking PSA finance claim online.

Types of PSA finance mis-selling

The FCA has not treated all car finance claims as though they arise in exactly the same way. Instead, it has identified several recurring patterns that help explain why some agreements may have been unfair.

This matters because a PSA finance claim is not just about whether commission existed. It is about how that commission worked, whether it influenced the price you paid, and whether you were given enough information to make an informed decision.

PSA finance discretionary commission

One of the best known forms of car finance mis-selling involves discretionary commission arrangements, often shortened to DCA.

Under this model, the dealer could adjust the interest rate within limits set by the lender. If the dealer increased the rate, the commission they received could also increase. The problem was not simply that commission was paid. The issue was that customers were not always told the rate could be moved in this way, or that the dealer had a financial incentive to raise it.

This is why PSA finance discretionary commission cases are such an important part of the FCA car finance review. They are also among the most common types of car finance claims across the market.

Average compensation for discretionary commission cases is estimated at around £810 per agreement.

Contractual ties and limited lender choice

Another issue arises where dealerships had preferred or restricted relationships with certain lenders.

In practice, this could mean a customer was guided toward PSA Finance UK without being shown a genuine range of alternatives. A customer may have believed the agreement offered was simply the best or only available option, when in reality the choice may have been narrower than it appeared.

The key issue here is transparency. If you were not clearly told how the dealer’s relationship with the lender affected the options being shown to you, that may now be relevant to a PSA car finance claim.

Average compensation in these cases is estimated at around £807 per agreement.

Excessive or high commission structures

Some agreements involved commission levels that went well beyond what most customers would reasonably expect.

These cases are less common than discretionary commission, but they often lead to higher compensation because the financial impact can be more significant.

Where unusually high commission formed part of the cost of credit, the FCA treats this as a stronger indicator that the agreement may have caused real financial disadvantage.

Average compensation in high commission cases is estimated at £1,200 or more per agreement.

Why these categories matter

These categories are useful because they explain why not every PSA finance compensation outcome will look the same.

Some claims may lead to modest redress. Others may result in a more meaningful payment. The outcome depends on how the agreement was structured and what effect that structure had on the amount you paid over time.

You do not need to work out which category applies to you before starting a claim. The lender is expected to assess that under the FCA framework. What matters at this stage is whether your agreement may have been affected by one of these patterns.

Could this apply to your PSA finance agreement?

You do not need to be certain that something went wrong to consider a claim.

You may be eligible if:

• the interest rate was not clearly explained
• commission was not mentioned
• the agreement felt rushed
• you were not offered multiple options
• you relied on the dealer’s recommendation

You may still qualify even if:

• the agreement has ended
• you settled early
• you no longer own the vehicle

When a claim may be less likely

Some agreements may not result in compensation.

This can include:

• interest-free deals
• agreements with minimal commission
• cases where no financial disadvantage is identified

How PSA finance claims are assessed in practice

Once a PSA finance claim is submitted, the process is handled by the lender under FCA rules.

This is not about arguing your case. It is about reviewing the agreement objectively.

The lender will:

• retrieve your agreement and payment history
• analyse how the interest rate was set
• assess whether commission influenced pricing
• compare your agreement to a fair benchmark

This comparison is key.

It looks at what your agreement would likely have cost if it had been structured without the influence of commission.

How PSA finance compensation is calculated

Compensation is based on financial difference, not cancellation.

The process typically involves:

1. Identifying whether commission influenced the interest rate
2. Recalculating the agreement using a fair rate
3. Comparing the revised payments to what you actually paid
4. Adding interest to reflect the time passed

This is why PSA finance compensation varies.

Some agreements result in smaller adjustments, while others, particularly those with higher commission impact, may result in larger payouts.

FCA timelines and payouts 2026

To manage the volume of claims, the FCA has divided them into two groups.

Scheme 1

• Agreements from April 2007 to March 2014
• Decisions expected after August 2026
• Payments often into early 2027
• Average compensation around £734

Scheme 2

• Agreements from April 2014 to November 2024
• Decisions expected by September 2026
• Payments from late 2026
• Average compensation around £881

Deadline to claim

The final deadline to submit a PSA finance claim is 31 August 2027.

While this gives you time, claims submitted earlier are more likely to be processed sooner.

Starting with a car finance refund check

Many people begin with a car finance refund check.

This allows you to:

• check whether your agreement may qualify
• start without full paperwork
• understand your position before proceeding

Some people choose to work with finance claims experts for convenience, but this is not required.

Frequently Asked Questions

How do I know if I can make a PSA finance claim?

If important parts of your agreement were not explained properly when you took it out, you could be eligible to make a PSA finance claim.

This can include cases where commission was not disclosed, where the interest rate was higher than you were led to believe or where you were not given the chance to compare a full range of finance options. You do not need to know exactly what went wrong. The lender should check your agreement against FCA rules and advise if compensation is due.

Is PSA finance mis-sold the same as any other car finance claim?

Not exactly, but it sits within the same wider car finance scandal.

The FCA review looks across the whole market, but each PSA finance claim is still assessed on its own facts. That means the same broad rules apply, but the outcome depends on the detail of the individual agreement, including whether commission influenced pricing and whether key information was explained properly.

Do I need to know whether my agreement involved discretionary commission?

No. You do not need to prove that your agreement involved PSA finance discretionary commission before starting a claim.

That is something the lender should assess as part of the review. If you suspect the rate was higher than expected, or you were not told how pricing was set, that is usually enough reason to check whether your agreement may qualify.

Are PSA customers being refunded automatically?

No. Not every customer will receive compensation automatically.

Each agreement is reviewed individually under FCA car finance rules. If your agreement is found to have been unfair, you may receive a PSA finance refund or a PCP refund or compensation payment. If it does not meet the criteria, no payment will be made.

That is why many people prefer to start the process themselves rather than wait to be contacted.

Do I claim for PSA finance now, or wait?

You can always wait, and some customers will be contacted by lenders as the scheme develops.

But the earlier you claim, the more control you will typically feel you have over the process and the timescales. Waiting and receiving compensation later is of course possible, but the process is likely to feel more drawn out and out of sight.

This is especially the case with a final deadline of 31 August 2027.

What are Scheme 1 and Scheme 2?

The FCA has split car finance claims into two groups based on when the agreement was entered into [2].

Scheme 1 - agreements made from 6 April 2007 to 31 March 2014. These are anticipated to be processed later in the scheme, with many payments spilling into early 2027.

Scheme 2 - agreements made from 1 April 2014 to 1 November 2024. These are anticipated to be processed first, with many payouts 2026 starting from late 2026.

This approach has been designed to manage the scale of the scheme, and help ensure that the review process is as consistent as possible.

When will I receive PSA payouts?

If successful, it is anticipated that the first 2026 payouts will be made from late 2026. We anticipate that most customers will receive decisions and payments from late 2026 to early 2027, particularly in relation to Scheme 2 agreements. Complex claims, for example disputed claims or those that require further checks, may take longer to process.

How long will a car finance claim take?

It depends on the timing of your claim and the complexity of the agreement.

The sooner you make a claim for an agreement in Scheme 2, the more likely it is to be processed. Claims for Scheme 1 agreements should take longer. Overall, most claims are expected to progress through the system between late 2026 and early 2027.

The best answer is that timing will depend partly on the age of the agreement and partly on the timing of your claim.

How much PSA finance compensation might I be entitled to?

There's no single standard answer to this.

As a broad guide, across the whole market, average compensation is reckoned to be about £829 per agreement [3], but the actual amounts will vary according to the type of mis-selling and the financial impact on the customer.

Will I get all of my car finance payments back?

No. In the majority of cases you will not get all of your payments back.

The FCA scheme is intended to return you to the position you would have likely been in had the agreement been fair. So the compensation you receive will generally reflect the difference between what you paid and what you should have paid, plus interest.

A PSA finance refund is normally a corrective payment, not a complete unwinding of the agreement.

I can’t find my car finance agreement. Can I still claim?

Yes. There are various methods of tracing an old agreement.

Bank statements, emails and old paperwork can be searched. Credit reports can be obtained from credit reference agencies, such as Equifax, Experian or TransUnion. These may show historic car finance agreements. PSA Finance UK can be contacted directly, or a car finance refund check can be used. In some cases, finance claims experts can track down agreements using basic personal information and approximate dates.

Do I need to use finance claims experts?

No. You can make a claim to the lender yourself without a third party.

Some people prefer to use finance claims experts as they like support with the process, guidance with the next steps or don’t want to deal with the paperwork. It’s a personal choice and not a necessity.

It doesn’t affect the FCA criteria, but may be more convenient for some people.

Can I still claim if my agreement has ended?

Yes. A PSA car finance claim is based on how the agreement was structured and explained, not whether it is still active.

You may still be able to claim if you finished paying, settled early, or no longer own the vehicle. Many car finance claims now being reviewed relate to agreements that ended some time ago.

Can I claim on behalf of someone who has passed away?

Yes. The FCA scheme still applies where the original customer has died.

Executors and beneficiaries can make a claim on behalf of the deceased. Use your own personal details, but make it clear that you are acting on behalf of another, and provide as much information as possible about the original customer and agreement.

The lender may request supporting evidence before any compensation is paid.

What happens if my PSA finance claim is rejected?

If your claim is rejected, that does not always mean the matter ends there.

You can review the explanation given by the lender and check whether the FCA rules appear to have been applied properly. In some cases, it may be possible to challenge the decision or take the complaint further.

This is one reason why it is useful to keep a record of your correspondence and the lender’s reasoning.

What this means for PSA customers

The real significance of 2026 is not just the possibility of compensation. It is the fact that there is now a clear and consistent way to look back at agreements that once felt normal and ask whether they were fair.

For PSA customers, that changes the starting point. You no longer need to guess, rely on assumptions, or interpret the agreement alone. There is now a defined framework for reviewing how it was structured, what it cost, and whether that outcome should be corrected.

Some agreements will lead to compensation. Others will not. The important difference now is that the decision is made through a visible process rather than uncertainty.

If you want to understand where you stand, the next step is simply to check your agreement and see how it fits within the FCA scheme.

_________

References:

1. around 12.1 million agreements are being assessed - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. The FCA has split car finance claims into two groups based on when the agreement was entered into - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. As a broad guide, across the whole market, average compensation is reckoned to be about £829 per agreement - https://www.dailymail.co.uk/money/cars/article-15691403/FCA-says-12MILLION-829-payouts-car-finance-compensation.html