The Great Car Finance Scandal: Are You Owed £1,100?

Anthony McGrath • December 18, 2025

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The "PPC" typo that could be worth THOUSANDS. Here is the full breakdown of the PCP/HP Mis-selling Saga.

If you are looking for information on "PPC Claims," you are almost certainly looking for the PCP (Personal Contract Purchase) Car Finance Scandal.


This is currently the biggest consumer finance topic in the UK, with experts like Martin Lewis suggesting it could be the "next PPI." However, the legal situation has been a rollercoaster over the last 12 months.


Here is the expanded, plain-English guide to what happened, who is eligible, and why you might have to wait until 2026 for a payout.

1. The Core Issue: "Rigged" Interest Rates


Between April 2007 and January 2021, many car dealers and finance brokers operated under "Discretionary Commission Arrangements" (DCAs).


In simple terms, lenders gave car dealers the power to set your interest rate.


  • The Conflict: The higher the interest rate the dealer charged you, the higher the commission they received from the lender.
  • The Result: You may have been placed on a rate of 5% or 10% (or higher) when you could have qualified for a much cheaper rate, just so the dealer could earn a bigger bonus.


You would never have known this was happening because the commission details were hidden in the small print or not disclosed at all.



2. The Legal "Rollercoaster" (2024–2025)


If you have been following the news, you might be confused by conflicting headlines. Here is the timeline of the legal battle:


  • January 2021: The FCA banned these "Discretionary Commissions."


  • October 2024 (The Bombshell): The Court of Appeal ruled that all hidden commissions were unlawful because dealers were acting as "fiduciaries" (trusted advisors) and didn't get your informed consent. This looked like a guaranteed win for consumers.


  • August 2025 (The Twist): The Supreme Court partially overturned that decision. They ruled that simply "not knowing" about a commission wasn't automatically unfair in every case, but they did uphold claims where sales practices were misleading or commissions were exceptionally high.


  • Dec 2025: The Financial Conduct Authority (FCA) is currently designing a mass compensation scheme.


3. Am I Eligible?


You are likely eligible to join the complaint queue if:


  • You bought a car, van, or motorbike on PCP or Hire Purchase (HP).


  • You took out the finance agreement before January 28, 2021.


  • (Crucially) There was a Discretionary Commission Arrangement involved.


Note: This does not apply to Personal Contract Hire (PCH/Leasing) or interest-free credit.



4. How Much Could I Get?


The FCA is currently consulting on a redress scheme with an estimated average payout of £1,100 per agreement. However, if you had a large loan (e.g., a luxury car) with a heavily inflated interest rate, your claim could be significantly higher.



5. The "Pause" (Why you won't get paid today)


Because the legal situation is complex, the FCA has paused the deadline for lenders to respond to these complaints until May 2026.


This means you can (and should) complain now, but the lender simply has to log your complaint and send you an acknowledgement. They do not have to give you a final "Yes/No" or send a cheque until the pause is lifted.



6. Action Plan: What To Do Now


Do not wait until 2026. You need to "stop the clock" on your claim to ensure you don't miss any time-bar deadlines.


  1. Find your paperwork: Look for the name of the finance company (e.g., Black Horse, MotoNovo, Santander), not just the dealer.
  2. Use a Free Tool: Do not pay a Claims Management Company (CMC) 30% of your winnings. You can do this for free. Search for the "Martin Lewis Car Finance Tool" or use the free template letters provided by Citizens Advice.
  3. Send the email: Ask the lender: "Did my agreement have a Discretionary Commission Arrangement?"
  4. Wait: Once you have your acknowledgement, sit tight. The FCA is expected to finalize the compensation rules in early 2026.


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