Car finance complaints

This site is a guide to car finance complaints. It isn't run by a claims company or a law firm, and it doesn't take on claims. It has no connection with the FCA, any lender, any claims firm or any law firm.

The Financial Conduct Authority (FCA) has set up a scheme for car finance complaints. On its car finance claims page, the FCA says: "You don't need to use a CMC or a law firm to take part in our scheme." CMC stands for claims management company. People can complain for free without using one.

What the scheme is about

The FCA calls whoever arranged the loan the broker. The lender may have paid the broker a commission.

The scheme may apply, the FCA says, to people who used car finance for a car, motorbike, van or campervan between 6 April 2007 and 1 November 2024. The other condition is that they "weren't told about certain arrangements between the lender and broker".

The FCA names three kinds of arrangement. A discretionary commission arrangement "allowed the broker to adjust the interest rate you paid to get a higher commission". In a high commission arrangement, the commission was at least 39% of the total cost of credit and 10% of the loan. A contractual tie is where the broker only used one lender, or gave one lender first refusal on the loan.

Where the scheme stands

On 4 November 2026, the FCA's page said that its scheme had been legally challenged, and that parts of it had been suspended. The FCA says the challenge is due to be heard between 16 February and 3 March 2027, with a judgment expected in the months after.

Until the legal process ends, the FCA says, lenders do not need to calculate or pay compensation under the scheme. Some lenders may choose to make settlement offers before then. If the scheme is upheld, and the judgment isn't appealed, the FCA expects payments under it to begin in 2027.

Complaining to the lender

The FCA says the best thing people with concerns can do is complain to the lender named on their finance agreement. Its page lists lenders' contact details, with a template complaint letter.

People who can't remember the lender can look through old bank statements or ask the dealer, and their credit file may also list it. Once a lender responds, the FCA says, the person has one month to accept or challenge its response.

Citizens Advice says that anyone still paying off their car finance should keep making the payments, because stopping might harm their credit score and they could lose the vehicle.

The FCA warns that scammers pose as car finance lenders, and that people should never share PINs or passwords, or give bank details unless they are sure who is asking.

The Financial Ombudsman Service

If a lender's decision under the scheme leaves someone unhappy, the FCA says they can complain to the Financial Ombudsman Service. They need to do it by the date given in the lender's letter.

The Ombudsman says: "Our service is free and easy to use. You don't need to pay anyone to represent you, for example, a lawyer or claims management company (CMC)." People can ask a family member or a friend to help.

The Ombudsman asks people to keep a note of calls, emails and other correspondence with the business. People should keep the business's final response as well, because the Ombudsman will ask to see it.

Claims firms and their fees

The FCA says that people who sign up with a CMC or law firm "may end up paying for a service you don't need, including up to 36% in fees, including VAT, out of any compensation you receive."

If a lender paid £1,000, a claims firm or law firm could take up to £360 of it (the FCA says fees can be "up to 36%, including VAT"). Complaining yourself is free.

An example, not an estimate of what you might get.

The Solicitors Regulation Authority (SRA) says: "Don't sign up to multiple CMCs or law firms to represent you. Doing so may lead to multiple fees."

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