Asger Risom
A major legal ruling could impact millions of drivers who financed their cars before 2021. While fewer claims may qualify, many could still be owed compensation for unfair loan arrangements.
A major legal ruling could impact millions of drivers who financed their cars before 2021. While fewer claims may qualify, many could still be owed compensation for unfair loan arrangements.
The Roots of the Dispute
Car finance complaints have surged, with some drivers unknowingly overpaying due to hidden commission deals between lenders and brokers before 2021.
What Is a Discretionary Commission Arrangement?
Discretionary commission arrangements (DCAs) let brokers increase interest rates to boost their own pay — often without the customer’s knowledge.
Supreme Court Draws a New Line
The Supreme Court ruled that not all commissions are unfair — but a 55% hidden commission was. This sets a key legal precedent for future claims.
Commission Must Be Transparent
Even if a deal wasn’t under a DCA, it can still be challenged if the commission was excessive and undisclosed, the ruling confirmed.
Fewer Claims, But Bigger Stakes
Although fewer drivers will qualify, up to 14.6 million may still have valid claims, potentially amounting to £18 billion in payouts.
Who Has the Strongest Case?
Drivers who financed cars under a DCA — where brokers could set their own rates — have the highest chance of receiving compensation.
What If You Didn’t Have a DCA?
You may still be eligible if your deal involved a large, undisclosed commission — even without a DCA in place.
What Drivers Should Do Now
Check your finance agreement, find out if a DCA was used, and seek legal advice. Claims can be made for free through your lender or the Ombudsman.
Future Compensation Scheme in the Works
The FCA plans to launch a scheme in 2026, making it easier for affected drivers to receive payouts without needing to go to court.
This article is made and published by Asger Risom, which may have used AI in the preparation
