If you took out a car finance agreement between 6th April 2007 and 1st November 2024, there is a reasonable chance you are owed money under the Financial Conduct Authority's motor finance consumer redress scheme, finalised as PS26/3 in March 2026. The scheme covers an estimated 12.1 million eligible agreements and a total redress pot of around £7.5 billion, with an average payout near £829 per agreement.
This guide walks through the scheme as it stands today: who qualifies, what to expect, what the key dates are, and why you should not pay a claims management company to do any of it for you.
Quick background
Between the mid-2000s and late 2024, most UK car finance was sold through dealers who were paid commission by the lender. A lot of that commission was structured in ways the customer never heard about: Discretionary Commission Arrangements (DCAs) that let the broker push up your interest rate to earn more, high-commission deals that exceeded reasonable thresholds, and contractual tie arrangements that funnelled customers toward particular lenders regardless of the customer's best interest.
In October 2024 the Court of Appeal handed down judgment in Johnson v FirstRand, holding that undisclosed or insufficiently disclosed commission can amount to an unfair relationship under section 140A of the Consumer Credit Act 1974. The ruling was partially overturned in aspects by the Supreme Court in 2025, but the FCA consumer redress scheme formalises a compensation framework that does not depend entirely on the remaining legal position. The scheme is set out in PS26/3.
Who qualifies
The scheme covers you if all of the following are true:
- You entered into a regulated motor finance agreement (PCP, Hire Purchase, conditional sale) between 6th April 2007 and 1st November 2024.
- The agreement was for a car, van, motorbike, or similar vehicle for personal use.
- The lender paid commission to the broker or dealer that arranged the agreement.
- The commission arrangement was not properly disclosed to you at the time.
You do not need to have refinanced, settled early, or had any dispute with the lender. The scheme is opt-out, which means lenders are required to write to you if you qualify. You do not have to chase first.
What happens when
The scheme runs on a fixed timeline. The headline dates:
| Date | What happens |
|---|---|
| 30th June 2026 | Lenders must start contacting eligible customers (agreements from April 2014 onwards) |
| 31st August 2026 | Deadline for lenders to contact all eligible customers (including pre-April 2014) |
| 31st October 2026 | You must have received a decision on compensation from the lender |
| November 2026 onwards | Payments begin flowing |
| 31st August 2027 | Final deadline for you to lodge a complaint about the scheme's handling |
One caveat: a consumer advocacy group, Consumer Voice, has filed an objection at the Upper Tribunal challenging the scheme's design, arguing it under-compensates. The objection window closed on 27th April 2026 and the scheme continues to run pending any ruling. If a ruling expands the scheme, pending and already-paid complaints will benefit. Late complaints may not.
What you can claim
The scheme covers three heads of loss:
- Overpaid interest where a DCA was in play. Typically the biggest component.
- Undisclosed commission at levels above reasonable thresholds (shorthand: above 10% of the loan or 39% of the credit cost).
- Contractual tie losses where the broker's commercial arrangement steered you to a more expensive product than you would otherwise have been offered.
The average payout is estimated at £829 per agreement but varies widely. DCA-heavy agreements with long terms can run into several thousand pounds. Fixed-rate PCPs with small commissions may see little or nothing.
Do you need a claims management company
No. This is important.
The FCA's own guidance is clear: you can complain directly to your lender for free, and you can escalate to the Financial Ombudsman Service for free. There is nothing a claims management company (CMC) can do that you cannot do yourself in under an hour. CMCs typically charge 25 to 30 percent of your compensation. On an average £829 payout that is £200 to £250 you will never see.
As of this month, the FCA has forced the removal of 899 misleading CMC advertisements since January 2024. One CMC was banned this week alone for using unauthorised Martin Lewis clips and the FCA's own logo to inflate their credibility. Martin Lewis has said publicly: complain directly, not through a CMC.
What to do
There are two paths.
If you want to wait. Do nothing. The lender is required to contact you by 30th June 2026 (post-April 2014 agreements) or 31st August 2026 (pre-April 2014). When they do, they will either offer a specific sum or tell you why they think you are not eligible. You can then accept, reject, or challenge the decision.
If you want to start now. Gather your original finance agreement, your monthly statements, and any correspondence from the dealer or lender. Draft a complaint letter to the lender invoking the PS26/3 scheme and requesting a decision on eligibility and compensation. Give them eight weeks. If they do not respond substantively, or the response is inadequate, escalate to the Financial Ombudsman Service. Free, at no cost to you, decision within a few months.
EvenStance automates this path. The platform takes your agreement details, drafts the complaint letter, tracks the 8-week response window, and prepares the FOS escalation automatically if the lender fails to resolve. Start a free case and the whole thing runs in under ten minutes.
Watch-outs
- Do not sign anything that assigns your rights to a CMC. Once signed, the CMC's percentage is contractually locked.
- Do not accept the first offer without checking. Lender-initial offers are often below what the FOS would award.
- Do not miss the 31st October 2026 deadline to respond to a lender decision. Silence is treated as acceptance.
- Keep every document. The original agreement, statements, letters, and any dealer marketing material. If this goes to FOS you will need them.
The underlying point
The scheme exists because the motor finance market spent twenty years paying commissions that were, in most cases, never properly disclosed. The law caught up. The regulator has drawn a line. The compensation pot is there to be claimed by the people it belongs to, which is you, not the CMCs.
File the complaint. Keep the paperwork. If in doubt, escalate.
Start your motor finance complaint in under ten minutes on EvenStance. Free to register, no CMC fees, no surrendered percentage.
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Dan Warrener
Consumer rights advocate
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