Car Finance from 2007–2021? You Could Be Owed £4,000 or More—Here’s Why

Between 2007 and 2021, millions of people in the UK took out car finance agreements. These included deals for cars, vans, and motorbikes using products like Personal Contract Purchase (PCP) or Hire Purchase (HP). Many of these agreements came with undisclosed commissions—extra fees that most buyers never saw.

Now, this practice is under investigation. If you took out vehicle finance during this period, you may be entitled to compensation. The average claim could be worth over £4,000.

What Happened with Car Finance Deals?

During the years in question, it was common for car dealers to act as intermediaries between buyers and finance companies. They would arrange a loan and present it as part of the deal.

What most buyers did not know is that dealers often used discretionary commission arrangements. This meant they could increase your interest rate and earn more commission in return. The higher the rate you agreed to, the more money they made.

You paid more—without knowing why.

This setup created a conflict. Dealers had a reason to push for worse deals, not better ones. And because this commission was often not disclosed, customers could not give informed consent.

Why the FCA Got Involved

The Financial Conduct Authority (FCA) is the UK’s financial regulator. In 2021, it banned discretionary commission models in the car finance industry. The ban stopped dealers from increasing interest rates to boost their pay.

But the FCA is now going further. After receiving complaints and seeing rising legal challenges, it launched a formal review in 2024 into past deals. The goal is to decide if large-scale compensation is owed to people who were mis-sold finance.

This could be similar to the PPI scandal, where billions were paid back to consumers.

Who Qualifies for a Car Finance Claim?

If you took out a car, van, or motorbike loan between 2007 and January 2021, you might qualify. You do not need to still have the vehicle or the paperwork. Many claims are based on the finance provider and the agreement terms—not the car itself.

To be eligible:

• Your agreement must have included commission paid to a broker or dealer.

• That commission must not have been clearly disclosed.

• The interest rate may have been higher due to this hidden commission.

Even if you paid off the loan years ago, you can still make a claim.

What Types of Finance Are Affected?

The most affected products are:

• PCP (Personal Contract Purchase) – Very common with new cars

• HP (Hire Purchase) – Used across new and used markets

• Lease-Purchase and Conditional Sale Agreements

These finance types were widely used by major brands and lenders. Examples include agreements made through dealerships for cars from Ford, VW, BMW, Mercedes, Vauxhall, Nissan, and more.

How Much Could You Receive?

Compensation amounts vary. It depends on:

• The loan size

• The interest rate charged

• The commission that was included

Early reports show that many claims fall between £1,000 and £4,000, with some exceeding that. If the commission caused your interest rate to rise, that difference is part of your potential refund.

How to Check If You Can Claim

You can start by checking:

• Who your finance agreement was with (the lender, not just the car dealer)

• The year of the agreement (must be between 2007 and 2021)

• What type of loan you used (PCP, HP, etc.)

You do not need to find all the paperwork. Most claim companies or legal firms can request records from the lender.

To begin, you can:

• Contact the finance provider directly

• Use a regulated claims service

• Visit the Financial Ombudsman Service if your claim is rejected

Tip: Avoid unregulated firms or companies asking for upfront fees. Always check credentials.

Why This Matters Now

The FCA is currently reviewing how complaints were handled and may order mass compensation across the industry. That decision is expected in late 2024 or early 2025.

If you wait, you might fall outside of deadlines. Many consumers are checking now to secure their place in case a refund scheme begins.

You may have trusted the dealer to give you a fair deal. If that deal included a hidden cost, you deserve to know—and be refunded. Claims are already being filed across the UK.

If you used car finance between 2007 and 2021, it costs nothing to check. You could be owed more than you think.

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