Mis-Sold Car Finance: What’s Happening, Who’s Affected, and How We Can Help
It is estimated that in excess of 14 million UK consumers were mis-sold finance agreements relating to cars, motorbikes, and campervans during the period April 2007 to November 2024. This is being hailed as the biggest financial redress since PPI as billions in compensation are set to return to consumers.
What’s Going On?
The Financial Conduct Authority (FCA) believes that many car finance deals were structured unfairly, allowing brokers and dealers to earn higher commissions by charging customers higher interest rates, without properly explaining how those rates were set. Due to this, the FCA have confirmed that a redress scheme will be introduced in 2026 to compensate affected customers.
At the moment, we are in the “consultation” phase of the mis-sold car finance claims process. This means that once a formal complaint is submitted, the lender, broker, or dealer has a set period (typically three months) to review the complaint and respond. if it is determined that you were mis- sold then you’ll receive a cash payment as compensation.
The financial regulator estimates that most people will receive around two-thirds of the commission that originally went to the dealer, translating to an average payout of approximately £700.00 per case.
The Three Types of Mis-Selling
There are three main types of car finance mis-selling that may make you eligible for compensation:
1. Discretionary Commission Arrangements
- Essentially, you bought a car on finance, but the dealer received a higher commission than they should have because your interest rate was inflated without your knowledge. In other words, the dealer increased your interest to earn more commission, meaning you paid more than you should have due to insufficient or misleading disclosure.
- Applies to around 5 million finance agreements.
- Common with Hire Purchase (HP) and Personal Contract Purchase (PCP) deals (not leases).
2. Hidden Contractual Tie
- Brokers often claimed they would “find you the best lender from a panel of lenders,” but in many cases, this wasn’t true. Instead, a preferred lender was given priority, meaning the process wasn’t genuinely As a result, you may have paid more than you should have due to misleading or false representations.
- Applies to around 3 million
3. Unfairly High Commission
- If over 35% of the cost of credit (the interest) went to the broker or dealer as commission — and that made up over 10% of the total loan cost, it’s considered a market distortion. If this wasn’t disclosed, you could be owed a refund.
- Applies to around 9 million agreements.
It is important to note that some agreements may include two or more types of mis-selling and each finance agreement (for each vehicle) is treated as a separate claim.
Why You Should Act Before the Redress Scheme Starts
The consultation period is expected to close in November 2025, with the official claims window opening in 2026.
Submitting your complaint now ensures:
- You’re included early in the
- You’re not relying on lenders to trace
- You can secure your position for
Why You Should Instruct TML Solicitors
At TML Solicitors, we make claiming compensation for mis-sold car finance simple, fast, and stress- free. Our expert team will check your eligibility, handle the entire process from start to finish, and ensure your complaint covers all three types of mis-selling, so you don’t miss out on what you’re owed.
We help clients across the UK by:
- Checking eligibility for mis-sold car finance
- Submitting complaints to the correct lender, broker, or
- Tracking and managing
- Maximising compensation under a no-win, no-fee Conditional Fee Agreement (CFA).
⬛ No upfront costs
⬛ Expert team experienced in financial mis-selling
⬛ We handle everything on your behalf
We will also run a quick Experian credit check to identify all past car finance agreements, making sure every potential claim is captured.
Put simply: we do the hard work so you don’t have to, and make sure you get the compensation you deserve.
The Bottom Line
- The FCA expects millions of payouts from
- Acting before the redress scheme launches gives you the best chance of being included
- Each agreement has the potential to secure a significant amount in
If you took out any car, motorbike, or campervan finance between 2007 and 2024, you could be owed money.
We can check whether your finance agreement was mis-sold and handle your complaint from start to finish.
No risk. No hassle.
Please see our details below:
TML Solicitors
63B King Street
Leicester
LE1 6RP
Tel: 0116 247 0022
Email: info@tml-solicitors.co.uk
