The Supreme Court’s landmark ruling on car finance mis-selling has opened the door for millions of UK drivers to claim compensation. If you took out a Personal Contract Purchase (PCP) or hire purchase agreement before January 2021, you could be entitled to a payout — and understanding the ruling is the first step to knowing whether you qualify.
What Did the Supreme Court Actually Rule?
In October 2024, the Court of Appeal ruled — and the Supreme Court subsequently upheld — that car finance lenders had been paying secret commissions to dealers without properly disclosing this to customers. This practice, known as a discretionary commission arrangement (DCA), meant dealers could increase the interest rate on your finance deal to earn a higher commission, at your direct expense.
The ruling confirmed that lenders had a legal duty to disclose these arrangements, and that failing to do so was a breach of fiduciary duty. This is highly significant: it means affected customers were effectively overcharged on their finance deals for years.
Could You Be Owed Car Finance Compensation?
Millions of UK drivers may be entitled to a refund. Check your eligibility in under 2 minutes — no upfront cost, no obligation.
Which Lenders Are Affected?
The ruling has implications for virtually every major car finance provider operating in the UK during the relevant period. Lenders including Lloyds Banking Group (Black Horse), Santander, Close Brothers, and many others have already set aside hundreds of millions of pounds in provisions to cover potential payouts. The FCA has estimated total industry redress could exceed £30 billion.
What Are the Key Dates?
To be eligible, your car finance agreement generally needs to have been taken out before 28 January 2021 — the date the FCA banned discretionary commission arrangements. Agreements after this date are unlikely to be affected. There is no strict upper time limit set yet, though the FCA has confirmed it is reviewing the position for older agreements.
How Much Could You Claim?
Payouts will vary depending on the size of your finance agreement and how much interest you were charged over the term. Early estimates suggest the average claim could be worth between £1,000 and £5,000, with larger agreements potentially resulting in significantly higher refunds. The FCA has not yet published a final redress scheme, but is expected to do so following the Supreme Court’s final determination.
What Should You Do Now?
The first step is to check whether you had a PCP or HP agreement before January 2021. If you did, you should consider registering your interest in making a claim before the FCA’s deadline — which is expected to be set once the redress scheme is finalised. Acting promptly ensures your details are on record and you don’t miss out.
At PCP Tax Rebates, we help eligible customers understand their rights and submit claims at no upfront cost. Check your eligibility today — it takes just a few minutes and could result in a significant refund.