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Car Finance: How to reclaim commission if you weren't told how much it was

If the commission on your agreement was unclear, you could be due money back

Rosie Hamilton
Rosie Hamilton | Edited by Hannah McEwen
Updated 23 December 2024

Millions more people may be able to claim money back on past car finance deals on the back of a landmark Court of Appeal ruling. It’s all about billions of pounds of car finance fixed, tiered or any other commissions that weren't fully disclosed. This guide includes Martin Lewis' need-to-knows, explains who can try in this uncertain situation, includes a free tool to do it for you, and crucially also questions whether this is a good or bad thing.
 

Until recently, the prime car finance reclaiming focus was the regulator's final stage investigation into the 40% of car finance policies with hidden Discretionary Commission Arrangements (DCAs), where dealers could up the interest to get paid more commission without consumers knowing. Our existing car finance DCA reclaiming free guide & tool covers that.

This is follow up guide after a landmark Court of Appeal ruling in October 2024 shook things up, with a second issue all about 'fully disclosing commission' that covers 99% of car finance policies - all where commission was paid, whether fixed, tiered, DCAs or other, potentially £10bn+ worth.

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In this guide

Warning. Ensure you read Martin's four must-knows before you start!

1. Don't do this without first checking if you've a car finance Discretionary Commission Agreement (DCA) reclaim, as my best guess is you're more likely to succeed with that than this

If that sounds like gobbledegook to you, you can jump straight to our Car finance DCA reclaiming guide & free tool for a full explanation, but here's a quick summary...

In January 2024, the regulator, the Financial Conduct Authority (FCA), announced a final stage investigation into hidden DCAs where dealers could up the interest to get paid more commission without consumers knowing – a clear lack of transparency and restriction of consumer choice. That investigation's not going to report before May 2025, but there are decent odds of a mass DCA commission redress system coming, with potential £1,000+ payouts.

Crucially, there’s no way to know if you’ve had a DCA without asking, so our free DCA complaint tool in the original guide drafts an email you can send to ask, then further asks the lender log a complaint if you did. That tool's already generated over 2.5m complaints for people.
  
Admittedly, even if you do potentially have a DCA, you don't have to start there. You could start with this guide which is much broader, and covers all forms of commission. However my best-guess (it's an uncertain situation) at the moment is those with a potential DCA claim are better off to start there and move here if that’s not for you. If you want to understand why, read this... 

  • Pros & cons of starting via the DCA route or this commission disclosure route

    If you’ve been told you didn’t have a DCA, or you got your car finance after January 2021, then you’ve no choice, the commission disclosure route which this guide covers is your only option. 

    However those with car finance policies before that, who've not done anything yet, could try either route. So I wanted to explain why my best-guess is not to start here but with a DCA claim. It's a bit complex, so it may be easier if you read the other need-to-knows about the court case first…

    • You have two possible routes to money back with a DCA claim, only one here. With a DCA claim you have both the original FCA investigation argument that people were overcharged because they didn’t know they could get the interest reduced. And you have the Court of Appeal ruling covered here that there was a breach because the type and amount of commission were not fully disclosed. 

      I strongly suspect if the final Supreme Court ruling backs up the Court of Appeal case, then that would automatically be incorporated into the FCA's processes when examining DCA claims anyway. So a DCA claim gives you both.

    • If the Court of Appeal ruling is overturned by the Supreme Court, as is possible, that won’t automatically kibosh DCA claims, as it will claims via this route. The FCA investigation into whether DCA is unfair is not a legal decision – it's a regulator's investigation. The FCA's argument about overcharging will still stand regardless of whether the Supreme Court overturns the Court of Appeal ruling in this case. So on the current mood music, DCA looks the better bet to get money back.

      Of course the Supreme Court could go down an entirely different route, which would throw it all up in the air – so there's a known unknown too (there are probably unknown unknowns too).

    • Yet, there is an argument the commission disclosure route is evidentially easier than a DCA case. With a DCA case, there is likely to be an argument over how much you are due, and what the harm was. You should be put back in the position you would’ve been in had there not been a DCA in place, but that isn’t particularly clear cut (the FCA will need to come up with rules on it).

      However under the commission disclosure ruling from the Court of Appeal, evidentially it is much clearer – were you told the details of the commission? – if not, there was a breach. So that does make it somewhat easier.

    Overall, in my view, the first two arguments outweigh the third one, so I'd start with a DCA case. Having said that, you are of course free to disagree and start here if you choose. It should be noted too, I am assuming that this will be a regulator-led process, rather than a court based one, which would be more complex. 

    Apologies for not being able to give firmer guidance. This is uncharted territory.

2. This guide follows a landmark Court of Appeal ruling in October 2024 that means car finance deals with undeclared commission were unlawful (though this ruling could be overturned)

In October 2024 the Court of Appeal in the combined Hopcraft v Close Brothers Ltd, Johnson v Firstrand Bank Ltd, and Wrench v Firstrand Bank Ltd case ruled: 

"the brokers never obtained the claimant's fully informed consent to the payment... the claimants were not told that it would be [paid], nor the amount nor any other material facts about the commission." 

My translation: if you weren't told all the facts you needed to make an 'informed decision' on your car finance deal, including the type and amount of commission the dealer or broker was going to be paid, then it was a breach of the law. And as people were rarely told the commission amount, or how it was worked out, this opens the door to a large number of similar cases.
 
This unexpected verdict sent shockwaves through the car finance industry, caused wobbles for regulators and reverberated right across the financial world. As it’s a precedent-setting Common Law decision, that means right now it is the law in the UK. 

Yet an application for an appeal to be heard at the Supreme Court has already been approved, and it would not be unusual for the Supreme Court to have a starkly different view to the Court of Appeal and overrule it, thus in practice changing the law again. A decision needs to be made speedily, by Spring 2025, so there's clarity, but there's no guarantee, and even then the fallout and any pay-outs will take time.

3. The Financial Conduct Authority (FCA) has announced a pause for firms having to deal with these type of complaints – signalling it could launch an investigation into this too (as well as DCA reclaiming)

As it stands, all car finance commissions that weren’t overtly declared broke the law.

In December 2024, the FCA confirmed it's extended the pause on firms dealing with car finance complaints to all commission complaints – not just DCAs as was previously the case. It also confirmed this latest pause will include car leasing (unlike DCA complaints which doesn't).

That means car finance providers do not have to provide final responses to motor finance non-DCA commission complaints received on or after 26 October 2024 until after 4 December 2025. 

Yet you can still log a complaint now. And indeed, if you are going to, getting a complaint in now means you’ve less risk of falling foul of any future time bar. It just means once you’ve complained firms can sit on it until things are decided, likely waiting until after the Supreme Court decision. 

This pause on complaints protects providers while there is uncertainty (as the law may change if the Supreme Court rules). Yet it's also a way of potentially opening it to more people. In other words it's the FCA saying that this issue is so big, and potentially widespread, that rather than firms having to look at individual cases, we need to ensure consumers are treated fairly and equally and that it's sorted en masse. 

4. The Big Question: Is this route fair? Is it even potentially dangerous for consumers...

With DCA reclaiming, you can see the argument of lack of transparency and restriction of consumer choice. Yet this is different. I’m not surprised it's caused share prices to tumble and economic concerns.
 
The wider Court of Appeal decision sets new strong standards for car finance commissions going forward. Yet on mulling it, even I find it difficult to believe that retrospective redress is due from car finance firms with fixed commissions, as they were following regulator's guidelines. And, even if redress is due, the test surely should be something like: "was it hidden that there was commission and, most importantly, was the commission charged excessive?"
 
If not, and we were to move to a hypothetical model of car finance reclaim where 'any commission if amount wasn't known' was unfair and should be repaid, it may risk being counterproductive to consumers as it's a potentially existential threat to consumer lending  – which could mean both less availability and higher costs in future.
 
In fact, I wrestled about whether we do a help tool for this or not. In the end I decided that MSE's role is to provide info for consumers, and if we don’t do it, the claims firms will sweep everyone up and people will then lose a chunk of any pay-outs that may come.

Yet please don’t read the fact we have a tool as a blanket ‘everyone should do this’. I hope you'll think carefully about whether you feel you were wronged and lost out, and only go for it if you do. 

Now over to the main guide, where the MSE team and I have worked on the practicals...

The 'could you be affected?' checklist

If you took out a regulated car finance agreement that had a commission arrangement that wasn't discretionary and the commission arrangement wasn't made fully clear to you when you took out the finance, you're likely to be impacted. 

Check if that's you... 

  • It's for motor vehicles: This includes cars, vans, camper vans and motorbikes that you've paid for with a motor finance agreement. 

  • Eligible dates: Finance taken out from April 2007 to roughly October 2024. Some with agreements more recent than October 2024 may qualify, but many of the big finance firms changed their rules around commission disclosure immediately after the Court of Appeal judgement to make sure they were in line with the new rules. 

  • Finance type: Personal Contract Purchase (PCP), Hire Purchase (HP) or Leasing (which is not included in the DCA commission investigation). Personal Contract Purchases are where you make loan-like repayments with the option to pay a larger 'balloon' payment at the end if you want to own the car. Hire purchase is where you pay off the total value of the car in monthly instalments.

  • It may impact you if you've been told you didn't have a DCA: Most people had some sort of commission arrangement on their car finance agreement. If you have been told you didn't have a DCA, it's very likely (though not 100% guaranteed) that the broker was paid a different type of commission by your car finance provider for arranging the deal. 

  • It's about vehicles for personal use: That includes commuting, but using it more than occasionally for business, or paying on your business account, will likely mean it won't count.

  • It applies even if the person has passed away: The relevant executor or beneficiary can claim on their behalf. Though it's likely the lender will want to see a copy of the will and the grant of probate to ensure any compensation due goes to the right person.

  • It applies even if the vehicle's paid off: Or you no longer own it. In fact, even if the car was repossessed, that doesn't change your right to claim.

  • Making a diesel emissions claim doesn't affect this: This is a separate issue, and complaints about unfair commission arrangements won't impact any separate claim about diesel emissions.

Should you complain now?

Even if you can see from the checklist above that you're likely to be affected, there are a few complexities to be aware of.

First, nothing is guaranteed until the Supreme Court hears the case (it anticipates this will be before 16 April 2025) and issues a judgment – it could disagree with the Court of Appeal ruling. So there is an argument to sit on your hands for now and wait and see what happens, as things could change. Though there is risk in doing that, as it's possible that the regulator adds some form of time restriction to these complaints. In that case, complaining sooner may help

And, second, as Martin explains above, it's harder to see the inherent unfairness on general car finance commission, and a high number of complaints could actually be counterproductive for consumers. 

The next steps if you do decide to complain

The FCA has stated that it's expecting more complaints to be lodged on the back of the High Court ruling while people await the Supreme Court ruling. So if you do decide to lodge a complaint, our key message is that you don't need to use a claims management firm. You can do it yourself, and our free tool will help you draft your enquiry.

In the first instance your enquiry should go to the lender that provided the car finance. This is the firm you actually paid each month – not the broker or car dealer.

Check any agreement documentation you have and collect as much information as possible about your car finance agreements (and keep them somewhere safe for future).

There are other routes to complain, but you won't get all the money you're due back

This guide is about following a regulatory complaints route, rather than a court route, as we think that’s easier – and less stressful – to do-it-yourself. So we've focused on following the regulator's (the Financial Conduct Authority) processes for redress... though according to the FCA, what you can do here will largely depend on what's decided in the Supreme Court in (likely) Spring 2025.

There is always the option to go through a court process instead – in which case, most people will likely need legal representation, which involves using some type of no-win, no-fee claims firm. Be aware if you choose this route, it could take up to a cut of up to 36% of whatever you get paid out (if, indeed, you do get any redress). Yet while we don’t cover that route, the choice – as always – is yours.

Don't know the details? 

Check your credit report (see how to check for free). If your agreement has been active in the past six years, it should be listed on there. You can also check any old bank statements if you have them.

If you've found the firm's name, but don't know the finance agreement details, give it a call and ask it to provide them. Though be aware, firms only need to keep information on finance agreements for six years after the agreement ends.

If your agreement's older, it's still worth asking as different firms may have different attitudes. But if it can't help, this may all boil down to whether you've found your paperwork. Similar was true in past reclaims, such as PPI and bank charges reclaiming.

If you really can't remember the finance provider, and you've no paperwork, submit a complaint to the dealership where you bought the car. It'll either deal with it, or forward it to the correct lender. Add in as many details as you can about when you bought the car, its registration, plus your name, date of birth and address at the time.

My car finance provider is no longer trading

If the provider's been dissolved, you won't be able to make a claim. If it's in administration or in the process of liquidation, you can complain to the administrator (you'll find it on the FCA register). If your complaint's later upheld, you'd likely become a creditor of the finance provider, but you may only get pennies in the pound back (if anything).

This is one of the cases where it may be worth complaining to the broker (the firm that organised your car finance – this could be the car dealer) instead.  

FREE car finance commission tool & template letter

As we've said before, there's no need to use a claims management firm to do this – we've made it easy to do yourself. All you have to do is answer a few questions on the details of your car finance, then our free tool will write you an email drafted by Martin (with feedback from lawyers and regulators) that you can send to your car finance provider(s).

The letter is designed to do two things in one...

1. Ask what type of commission your car finance agreement included (if any), and...
2. ... request if it wasn't disclosed as the the law now requires, to log it as a complaint.

Note: You can use the tool as many times as you need. It's best to submit enquiries for one person at a time, and for the main policyholder to be the person who sends the email to the car finance provider – this will make it easier for the firms to find the right policy. 

You can use this tool even if you've already used the one in our DCA reclaiming guide and been told you had a non-discretionary commission arrangement in place. It's possible to modify the letter to exclude the first paragraph if you prefer, however this could slow down responses from some firms. 

This template letter is for personal use only. Any other use, without the prior written approval of MoneySavingExpert, is strictly prohibited.

Generally, these things are best done in writing, but if that's too difficult for whatever reason, you can just call, but ask that it's noted down as a formal complaint and request written confirmation.

You can't be blacklisted for enquiring

In the early days of bank-charge reclaiming, way back in 2005, some people complained that firms were blacklisting them for raising the issue. The Financial Ombudsman quickly stamped on this sharp practice. Since then, firms are not allowed to block your custom or change the products they offer to you if you've made enquiries or complaints – so you shouldn't be worried.

What should you do next? It depends on the lender's response...

1. Not had a response?

By this we mean, not even a: "thank you we've got your email, and we'll reply in due course." This is obviously frustrating, as you won't know for sure that your email has got to the firm. So before you do anything else:

  • Check your sent box: Is the email definitely in your sent messages?
  • Check your junk mail: Check the reply isn't in your spam/blocked list.
  • Check the address you sent it to: Especially if you didn't use contact details automatically filled in by our tool.

If all those check out, we'd suggest giving them the eight weeks suggested in the template letter. If after that you still haven't heard anything at all you should follow up with the firm.

2. Had a response, what next? 

Bear in mind that these are uncharted waters, and we won't have full facts for a while, so in some cases we're making best guesses based on what's happened in past...

  • It says 'you DID have a commission arrangement and we've logged your complaint'. Great, your complaint is in, you've done all you need for now. Unless it requests any further info, get on with your life until the FCA announces next steps. We'll update you on what to do then.

  • It says 'your car finance DIDN'T have a commission arrangement' OR 'the commission arrangement was fully disclosed'. This is likely to be rare, we estimate only 1% of cases. A common question we get is a version of "how do we know they're being honest?". Well, barring rare data errors, it'd be staggering if a firm lied, particularly whilst the motor finance industry is under such close scrutiny by the FCA. So we must assume honesty.

  • It has only 'acknowledged your complaint'. This is frustrating, but crucially it means your enquiry has been logged and it will be dealt with eventually. 

    As the next steps aren't due to be confirmed by the FCA, you don't need to push for much else now. You can give the firm a bit more time to respond to your enquiry. 
  • It says 'we need more info' or 'we can't find your info'. If it wants more info, often because you've moved home or got a new email or mobile number since you took the agreement out. Firms have an obligation to ensure they're dealing with the right person.

    If you've given it all the info you can, and it can't locate you, it's trickier. The FCA says firms should make serious endeavours to find policies – and if you've got documentary evidence of a policy and it doesn't, it should take it into account.

    If not, it depends how long ago it was you took out the finance. If your car finance was active within the last six years, it should have details. If it was longer ago, it could become harder, but it should try. 

    If you do get a request for further info or ID, it's always a good idea to make sure it's definitely come from the provider you complained to – check the email address and that it's correctly noted any details you supplied. And even if you don't have the exact type of ID or info they're asking for, go back to it with what you can supply – as it should work with you to validate your complaint.
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