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Yes: the Consumer Credit Act gives you real legal protections over car finance, and the FCA’s redress scheme may mean you are owed compensation. Key rights include linked-credit liability, voluntary termination and unfair-relationship claims under section 140A. The FCA scheme covers many agreements from 6 April 2007 to 1 November 2024, though parts remain under legal challenge, so the smart move is to submit a complaint now. Start by using our free check to find your lender in under 60 seconds.
TL;DR:
- Voluntary termination applies to qualifying hire purchase or conditional sale agreements and caps liability at half the total payable; voluntary surrender offers no such cap.
- The scheme targets undisclosed high commission of at least 39% of total credit cost and 10% of the loan amount; personal contract hire is excluded.
- The FCA estimates average redress at about £830, but payments are paused during legal challenges and may begin in 2027 if the scheme survives.
- Complain directly to your lender, keep evidence about how the finance was sold, and escalate to the Financial Ombudsman Service if eight weeks pass without resolution.
- Section 140A claims depend on evidence of broker discretion, commission arrangements, or lender ties, so complex cases may warrant professional legal support.
The Consumer Credit Act 1974 regulates most credit agreements used to buy cars in the UK, including hire purchase (HP), personal contract purchase (PCP) and some conditional sale agreements. A “regulated” agreement is one covered by the Act’s consumer protections, which generally applies when credit is provided to an individual rather than a business and falls within the thresholds set by Parliament.
When you buy a car through a dealer using finance arranged by that dealer, you are often entering what the law treats as a linked credit agreement. This matters because it can shift responsibility away from the dealer and onto the lender when things go wrong.
Section 75A of the Act sets out how creditor liability works in these linked arrangements. The statutory text confirms that where a debtor has a claim against the supplier, such as a car dealer who misrepresented the vehicle or the finance terms, the creditor can also be held liable. In practice, this means you may be able to pursue your lender directly for problems caused by how the dealer or broker sold you the finance, rather than having to chase a dealer who may be unresponsive or no longer trading.
A few things determine whether your agreement qualifies for this kind of protection:
These exclusions exist because Parliament designed the Act primarily to protect individual consumers, not businesses with stronger bargaining power or access to commercial legal advice. If you took out car finance as a sole trader using the vehicle mainly for work, you may find some protections do not apply in the same way, so it is worth checking the specific terms of your agreement.
The practical effect of this framework is that car finance customers are rarely left without recourse, even when the dealer who sold them the car has gone bust or stopped responding to complaints. Because the finance was linked, your complaint route often runs through the lender who holds the agreement today, which is also the organisation the FCA redress scheme and the Financial Ombudsman Service typically hold responsible. That consistency is part of why so many recent car finance complaints have centred on lenders rather than the dealerships themselves, and it is the first thing to establish before you take any other step.
Three statutory tools come up again and again in car finance disputes, and knowing which applies to your situation shapes everything that follows.
Pro Tip: Check your agreement type before contacting your lender. Mentioning “voluntary termination” rather than “handing the car back” can be the difference between a capped liability and an open-ended debt.
The gap between termination and surrender catches out a lot of people. A lender has no particular incentive to volunteer the information that you might qualify for the cheaper statutory route, and several Financial Ombudsman Service rulings reflect exactly that problem. In one published decision, the Ombudsman found a firm had failed to properly explain voluntary termination rights to a customer and ordered a partial remedy, including adjustments to what the customer owed and compensation for the upset caused. FOS decisions in this area consistently expect firms to explain protective rights proactively, and the Ombudsman tends to rule in the consumer’s favour when that explanation is missing or the paperwork is unclear.
Unfair relationship claims under section 140A are a different kind of tool entirely. Rather than focusing on a single clause or missed payment, they look at the full picture: was commission paid to the broker in a way that incentivised a worse deal for you, was there a contractual tie between the dealer and a specific lender, and was any of this properly disclosed at the point of sale? Building that case means gathering documentary evidence of broker discretion, commission structures and any ties between dealer and lender, rather than focusing on the car itself or how it performed mechanically. Because these claims hinge on detailed evidence rather than a simple factual trigger like a missed payment, they are the category where professional legal support tends to make the biggest practical difference.
If you took out car finance between 6 April 2007 and 1 November 2024, you may fall within the FCA’s motor finance redress scheme. The regulator estimates that around 37% of agreements from that period, roughly 12.1 million agreements, are eligible for some form of redress.
Not every agreement qualifies. The scheme generally excludes:
The FCA estimates an average payout of around £830 per agreement for customers who receive redress under the scheme, though individual amounts vary depending on the specific finance deal and the commission structure involved.
The scheme targets three broker behaviours in particular: discretionary commission arrangements, where the broker had freedom to set the interest rate and therefore their own commission; high commission, defined as commission equal to or above 39% of the total cost of credit and 10% of the loan amount; and contractual ties that limited the dealer to recommending only one or two lenders. Where any of these applied without clear disclosure, you are more likely to be owed money.
The FCA calculates loss using estimated loss percentages tied to how the commission was structured, then applies interest to reflect the time you have been out of pocket, subject to caps designed to keep awards proportionate. Parts of the scheme are currently subject to legal challenge, and payments are paused while that plays out. The FCA has indicated that if the scheme is upheld, payments are expected to begin in 2027. That pause does not mean you should wait. Lodging your complaint now preserves your place in the process and starts the relevant timetable running, regardless of how the legal challenge resolves.
Before you can complain effectively, you need to know exactly who you are complaining to and what happened. Most people have more than one piece of car finance in their history, and the lender named on your paperwork is not always the one still holding the agreement today.
Pro Tip: Keep every piece of correspondence with dates attached. A clear paper trail is often what turns a vague complaint into a successful one.
A common pitfall is writing a complaint that focuses on the car’s condition or performance rather than how the finance itself was sold or structured. The redress scheme and most Ombudsman decisions are concerned with the finance arrangement, not the vehicle, so keep your complaint focused on commission, disclosure and how the agreement was explained to you. Our guide to claiming car finance compensation walks through worked examples if you want to see how a strong complaint is structured before you write your own.
Compensation under the FCA scheme is built from a few consistent components: an estimated loss percentage based on how your commission was structured, interest to account for the time elapsed, and a recalculation of what you actually paid versus what a fair deal would have cost. Three protective limits are applied to keep the calculation proportionate and consistent across cases.
The FCA puts the average award at around £830 per agreement, though this varies considerably depending on the loan size, the commission type and how long the agreement ran. Ombudsman decisions add useful texture here: alongside financial redress, several rulings have included modest additional amounts for distress and inconvenience where a lender’s poor communication caused real upset, on top of refunding unfair charges or interest.
A few factors tend to push individual outcomes higher or lower:
No two cases look identical, which is exactly why checking your own agreement rather than relying on an average figure matters.
You can complain to your lender and escalate to the Financial Ombudsman Service entirely on your own, free of charge, and many straightforward cases are resolved that way. Claims management companies and law firms step in where the evidence is more complex, particularly for section 140A unfair relationship claims that require detailed analysis of broker commission and contractual ties. Typical market fee structures for claims management services are charged as a percentage of any successful payout, so it is worth understanding the fee basis before you sign up with any provider.
Where we fit into that picture is at the start of the process: our free check finds your car finance agreements in under 60 seconds, without needing your car registration or any lender paperwork, so you know what you are dealing with before deciding how to proceed.
For simple cases where disclosure failures are obvious, a direct complaint to your lender is often enough. For anything involving commission structures, contractual ties or a case that has already been refused once, professional support tends to be worth the extra scrutiny it brings.
Most people assume that if their car finance deal felt reasonable at the time, there is nothing to look into. That assumption is exactly why so many eligible customers never check. The commission arrangements and contractual ties the FCA scheme targets were rarely disclosed clearly, if at all, so a deal can feel fine on the surface while still qualifying for redress underneath.
Checking takes very little effort compared with what is potentially at stake. You can handle the complaint yourself, escalate to the Financial Ombudsman Service if your lender does not respond well, or hand the whole thing to a managed claims route. None of those options cost you anything to explore, and none of them require you to have suspected a problem in the first place.
— Jake
We built our free check around one goal: showing you in under 60 seconds whether you have a car finance agreement worth claiming on, without you needing to dig out a car registration number or any lender paperwork first. That matters most for people who switched cars several times over the years and have lost track of exactly who financed what.
Once you run the check, here’s what happens next:
If you have ever financed a car since 2007 and are not sure whether it is worth looking into, that uncertainty is the whole reason to check. Run our free check now and find out where you stand.
This article is general information, not a substitute for advice from a qualified lawyer. Consult a qualified legal professional about your own circumstances before acting on anything here.
The Consumer Credit Act 1974 regulates consumer credit agreements, including most car finance deals such as hire purchase and PCP, setting out rights like voluntary termination and protections against unfair lender conduct. It also governs when a creditor can be held liable for problems caused by a linked supplier, such as a car dealer.
The FCA has introduced a redress scheme covering agreements from 6 April 2007 to 1 November 2024, with an estimated 37% of agreements potentially eligible. Parts of the scheme are currently under legal challenge, so payments are paused, but the FCA expects them to begin in 2027 if the scheme is upheld, and complaints can still be submitted now.
This question is not something we can answer with a reliable, sourced figure here, and it sits outside car finance specifically. If you want a view on your own borrowing, checking your credit file through Equifax, Experian or TransUnion gives you an accurate personal picture.
A rebate generally refers to a reduction in the amount you owe, often applied when a finance agreement ends early through voluntary termination or early settlement, reflecting the interest you no longer need to pay. The exact amount depends on your agreement’s terms and how far through the term you are.
You can use our free check to locate your car finance agreements in under 60 seconds without needing registration details or lender paperwork, then see whether any look eligible for a claim under the FCA scheme or CCA rights.