The short answer
Car finance carries two sets of rights people rarely use. The first is the moment: an industry-wide redress scheme for hidden and inflated commission on agreements from 2007 to 2024. Free scheme, run by the lenders under FCA rules, no claims firm required. The second is standing law: a faulty car on finance is the lender’s problem, and once you’ve paid half, you can lawfully hand the car back and walk away.
What to do today: if you had car finance between April 2007 and November 2024, watch your post and email. Lenders must contact people they likely owe. Haven’t been contacted and don’t want to wait? You can complain to the lender yourself, free, any time up to 31 August 2027. And whatever you do, don’t pay anyone a cut of it.
The commission story, briefly
For years, many dealers arranging finance could earn more commission by charging you a higher interest rate, and mostly nobody told you. The practice was banned in 2021, the Supreme Court found undisclosed commission arrangements could make the lending relationship legally unfair, and in March 2026 the FCA confirmed a redress scheme to put it right across the industry: agreements taken out between 6 April 2007 and 1 November 2024, covering discretionary commission deals, unusually high commission, and arrangements that tied the dealer to one lender. The FCA’s estimated average payout is around £830 per agreement, with simple interest added on top at 3% a year, so old overpayments aren’t repaid in yesterday’s money.
Where the scheme stands, and what you actually do
The scheme has been challenged in court, and parts of it are currently suspended while the Tribunal hears the case. The status card at the foot of this page tracks the live position, and it’s checked against the source on the date it shows. The scheme’s design, though, is settled enough to act on:
If you’ve already complained, to your lender, at any point, you’re in the queue, and complainants are first in line when payments flow. There’s nothing to re-send.
If you haven’t complained, lenders must proactively contact customers they’re likely to owe by post, email and more than one attempt. Keep your contact details current with any lender you’ve used; a letter that can’t find you is compensation that can’t either.
If nobody contacts you and you think they should have, complain directly to the lender. Free, in your own words, naming the car, the dealer and roughly when. This can be any time up to 31 August 2027. A scheme outcome you disagree with can go to the Financial Ombudsman like any other financial complaint.
Outside the scheme: agreements where you’ve already accepted redress, had a court decide, or taken the same complaint through the ombudsman, and the very largest loans, which can still be complained about the ordinary way.
Never pay a claims firm for this
This scheme was built so you don’t need one: lenders must find you, assess your agreement under FCA rules, and pay what’s owed and the free route to challenge them is the ombudsman. A claims firm inserted into that process typically takes a third of your money for forwarding a complaint the system was already obliged to handle. If one has cold-called you about car finance, that’s the entire service on display.
The car is faulty and it’s on finance
On hire purchase or PCP, the finance company owns the car and supplies it to you which means the Consumer Rights Act’s standards (satisfactory quality, fit for purpose, as described) run against the lender. The dealer’s opinion is interesting; the lender’s obligation is the law. Within 30 days of delivery you can reject a faulty car outright for a full refund. After that, they get one shot at repair or replacement; if the fault persists, you can still reject, with a deduction allowed for the use you’ve had. Put it to the lender in writing:
“The [car] supplied under agreement [number] is not of satisfactory quality, in that [the fault, plainly]. Under the Consumer Rights Act 2015 my rights are against you as the supplier. I [reject the vehicle and require a refund / require you to arrange repair or replacement without significant inconvenience to me]. Please respond within 14 days; if we cannot resolve this I will complain formally and, if necessary, refer the matter to the Financial Ombudsman.”
The walk-away right
Buried in the Consumer Credit Act is a right dealers rarely mention: once you’ve paid half of the total amount payable (the whole agreement figure, interest and fees included, not half the car’s price) you can terminate a hire purchase or conditional sale agreement, return the car, and owe nothing more. Arrears already due still stand, and the car must be in reasonable condition for its age and mileage, but the right itself is statutory and cannot be signed away. It exists precisely for the moment a car you can no longer afford meets an agreement with years left to run. In writing:
“I am exercising my right of voluntary termination under sections 99 and 100 of the Consumer Credit Act 1974 in respect of agreement [number]. Please confirm the arrangements for returning the vehicle and a final statement of any arrears due to the date of termination. For the avoidance of doubt, I do not require any settlement figure. This is a statutory termination, not a settlement.”
Expect a settlement quote anyway, or a suggestion you owe more, hold the line. If the lender resists a valid termination, that’s a complaint, and complaints have a path you can follow.
If they say no
Every refusal on this page, a faulty-car claim rebuffed, a termination obstructed, a scheme outcome you dispute, becomes a financial complaint against the lender, and joins the process this site has already mapped: eight weeks for their final response, then six months to the ombudsman, free.
- Short-term right to reject a faulty car
From delivery30 days - Complaining about old commission yourself
If the scheme never contacts you31 Aug 2027 - Their time to answer any complaint
Final response8 weeks - Your window for the ombudsman
From their final response6 months
The scheme’s own timetable is the moving part while the legal challenge runs — the status card below stays current so this page doesn’t have to guess.
We’ll watch your dates
Enter the dates from your own complaint and we’ll email you before each one runs out. Nothing else is ever sent.
- A week before the company’s time to answer runs out
- A month before your window to escalate closes
- A week before that window closes
We store your dates and your address and nothing else, and delete both once the dates have passed. The newsletter is separate and lasts until you unsubscribe.
Common questions
Is PCP covered by all of this?
Yes. PCP is hire purchase in structure. A balloon payment doesn’t change its legal family, so the faulty-car rights, the walk-away right and the redress scheme all apply. For voluntary termination on PCP, half the total amount payable often arrives later in the agreement than people expect, because the balloon counts in the total; check your statement’s figures, not your instinct.
My finance was before 2007, or after November 2024.
Outside the scheme’s window, but not outside your rights. Commission concerns on any agreement can still be complained about the ordinary way, and everything else on this page (faulty cars, termination, the ombudsman) doesn’t depend on the scheme at all.
My lender has gone bust.
Then the route bends: complaints about a failed firm go to the Financial Services Compensation Scheme rather than the ombudsman. Start here and the router will point you at the right door.
Sources: FCA PS26/3 — Motor finance consumer redress scheme (scope, timetable, the 31 August 2027 backstop, and the current suspension of parts of the scheme); Consumer Credit Act 1974, sections 99–100 (voluntary termination); Consumer Rights Act 2015 (the standards a supplied car must meet); Financial Ombudsman Service.
Had the letter from your lender — or handed a car back?