Updated: 17 October 2025

Originally Published: 14 October 2024

If you used Santander car finance to buy your car, you are not alone in taking a fresh look at that agreement in 2025. The Financial Conduct Authority has opened a national consultation to fix unfair lending across the market [1]. 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?

This guide keeps things practical and human. You will learn what has changed this year, how to spot Santander mis-sold car finance, and how to start a Santander car finance claim [2] with confidence. We will also cover typical redress outcomes, the official timelines, and how to use a finance claims expert if you want help. Nothing here guarantees a result. 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 Santander car loans

For years, forecourt finance made life easy. You picked a car, the dealership arranged a Santander 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 their cost of credit. The FCA later banned this model for new business. Older agreements are now under review to check fairness.

Santander has prepared for potential refunds by booking a Santander motor finance compensation provision [3]. That is the company setting money aside so it can pay valid cases once the rules are finalised. It does not prove your case on its own, but it shows the lender expects to resolve a significant number of complaints.

What changed in 2025

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

Supreme Court clarity

In August 2025, the Supreme Court confirmed that commissions are not automatically illegal [4]. If a commission was hidden, excessive, or influential enough to change what you paid, the loan can still be unfair. That means many car finance claims Santander customers bring will continue to be valid if poor disclosure can be shown and costs were affected.

FCA consultation

In October 2025, the FCA opened a six-week consultation to design a national redress scheme covering agreements from 6 April 2007 to 1 November 2024. 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 [5]. 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.

The FCA’s three types of unfair agreement

Your Santander claim may fit one or more of these categories. The labels come from the FCA’s 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. 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 Santander car finance 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 Santander Car Finance was the only route available.

If several points ring true, a car finance claim with Santander may be worth starting. You can do this yourself for free, or with help if you prefer.

Who may qualify for a Santander car finance refund

You could be eligible for Santander 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 clearly explained.
• 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 [6]. 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.

• 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 Santander car finance settlement can also adjust fees that were not explained properly and add interest on the redress.

Santander has already recognised potential exposure through its Santander motor finance compensation provision, which is why you will see the company refer to resolving valid cases once the regulator finalises the approach.

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

You can submit a Santander 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 Santander 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 Santander 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 a finance claims expert

You can handle a Santander car finance claim yourself from start to finish. Many people do. Some prefer to work with a 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 of Santander mis-sold car finance.
• 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 Santander 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.

Key timeline for Santander 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. Santander compensation payments expected to begin once the scheme is running.

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

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 Santander 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 Santander 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.

Frequently Asked Questions

Can I make a Santander car finance claim now?

Yes. You can submit a complaint today. Commission-related final responses 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 Santander PCP and hire purchase agreements fall within the scope of the consultation.

How much might I receive?

The market-wide estimate is around £700 per eligible agreement. Some Santander PCP claim results may 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 Santander car finance settlement or closure letter 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 Santander car finance refund usually refers to the return of undisclosed commission and the interest that flowed from it. Santander compensation may also include statutory interest on the redress and correction of any unfair credit markers.

What if I only have a settlement figure and not the full agreement?

Send what you have and ask for copies of the original documents. The lender is used to requests like this and will tell you what they can provide.

I keep seeing the phrase mis-sold car finance Santander online. Does that apply to me?

That search phrase points to the same core issue. Hidden or poorly explained commission, high commission structures, and restricted choice. If your paperwork shows those features, a car finance claim Santander is worth exploring.

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 Santander 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 need help, a finance claims expert can organise the evidence and manage the process for you.

Whether you do it yourself or with support, a well-prepared Santander car finance claim gives the decision maker what they need to assess your situation 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 Santander car finance settlement or Santander car finance refund 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. The Financial Conduct Authority has opened a national consultation to fix unfair lending across the market - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
2. Santander car finance claim - https://www.santanderconsumer.co.uk/commission-arrangement-complaints/
3. Santander motor finance compensation provision - https://www.reuters.com/business/finance/santander-uk-makes-provision-against-possible-motor-finance-redress-claims-2024-11-20/
4. 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
5. Lenders are not required to issue final responses on commission-related complaints until 4 December 2025 - https://www.fca.org.uk/news/statements/firms-given-until-december-2025-respond-motor-finance-commission-complaints
6. £700 per eligible agreement - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme