Destination? Compensation

If you used finance to buy a car, motorbike or van, between 6 April 2007 and 1 November 2024 you could be eligible. People will be considered for compensation if they weren't told about certain arrangements between lenders and brokers (usually the car dealer), either:

• Their dealer or broker set the interest rate to earn more commission (using a discretionary commission arrangement).
• The commission was high – at least 39% of the total cost of credit and 10% of the loan.
• The dealer or broker was using one lender in most cases, a so-called tied arrangement, except where lenders can evidence that there were visible links with a manufacturer and franchised dealer. For example, where they shared a common or similar name.

On 1 August 2025, the Supreme Court ruled in the cases of Hopcraft, Wrench and Johnson. The Court upheld Johnson's claim, establishing that the agreement between Johnson and his lender was unfair – referring to the size of commission, which exceeded 55% of the total cost for credit, as being a “powerful indicator” of an unfair relationship. This ruling confirmed that commission arrangements can give rise to compensation where the relationship between the lender and customer is found to be unfair.

Following this, the Financial Conduct Authority (FCA) has confirmed that it has identified that many car finance lenders were not complying with either the law or their regulatory obligations, which has resulted in consumers losing out. In light of this, the FCA has published a compensation scheme, which it has estimated lenders' total redress liability up to £10 billion if all eligible consumers take part.

The Financial Conduct Authority (FCA) has set out when Lenders are expected to begin reviewing Claims under the FCA Scheme. Under the current rules, Lenders are expected to start assessing Claims from 30 June 2026 for agreements entered into on or after 1 April 2014, and from 31 August 2026 for earlier agreements. Lenders will generally then have up to three months to review and respond.

The FCA Scheme is currently subject to legal challenge, which is unlikely to be heard before October 2026. However, the FCA has confirmed that it will defend the Scheme and that Lenders should continue preparing unless told otherwise. This is positive, as it means work on the Scheme should continue while the challenge is ongoing.

This means submitting your Claim now remains important. It helps ensure your Claim is logged and ready to be considered as soon as the FCA Scheme, a revised scheme, or any alternative process is confirmed.

The amount of compensation you may be entitled to is dependent on several factors, including the amount of finance your lender provided, the date the finance was taken out, the duration of the agreement, the interest rate you paid and the nature and value of the commission payment your lender made to the car dealership.

The Financial Conduct Authority (FCA) confirmed in its consultation paper, that it would expect that most consumers will receive around £830 per eligible agreement.

Please note: all potential claim values used in our advertising, or on our websites are provided prior to deduction of our partner's Success Fee.

You do not have to use a law firm or claims management company to make your claim.

The Financial Conduct Authority (FCA) has published its rules for a motor finance compensation scheme which is free for consumers to use. If you are potentially eligible and have not already complained, your lender may contact you under the FCA Scheme. The FCA has also said that consumers who complain before the relevant implementation deadline are likely to be compensated sooner.

You are also entitled to choose to be represented. If you instruct our partner, they will submit your Claim, monitor its progress, review any response received and advise you on the next steps available, whether the matter proceeds under the FCA Scheme, a revised scheme, or through another complaint-led process.