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If you had a car finance agreement between 2007 and 2024, you need to read this. In March 2026, the Financial Conduct Authority published Policy Statement PS26/3 — formally launching an industry-wide compensation scheme for millions of consumers who were mis-sold car finance. The scheme targets £7.5 billion in payouts, covering approximately 12.1 million agreements. And the clock is ticking.
This post explains what has changed in 2026, what it means for your claim, and why acting now — rather than waiting — puts you ahead of the majority of consumers who are still unaware they are owed money. For a foundational explanation of what a mis-sold PCP claim is, start there first; then return here for the 2026 update.
What Is Car Finance Mis-Selling?
Car finance mis-selling occurred when dealers arranged PCP or HP finance agreements without disclosing that they were being paid a commission by the lender — and in many cases, without disclosing that they had the power to set your interest rate to increase that commission. The higher the rate, the higher the dealer's payout. You were never told.
This practice, known as a Discretionary Commission Arrangement (DCA), was banned by the FCA in January 2021. But it was widespread from at least 2007 onwards, affecting tens of millions of agreements. The FCA's own investigation, detailed in our guide to the FCA's motor finance investigation, found that on a typical £10,000 agreement, DCA practices resulted in consumers being overcharged approximately £1,100 over four years.
Beyond DCAs, the FCA's 2026 scheme also covers two additional types of undisclosed commission — full details are in our post on the three types of hidden commission in car finance.
What Changed in 2026: The FCA Redress Scheme (PS26/3)
Before March 2026, consumers had to submit individual complaints and wait for lenders to investigate — a slow, inconsistent process. PS26/3 changes this fundamentally.
Under PS26/3 — the final rules, lenders are now legally required to proactively identify consumers who were affected and make them compensation offers. You do not need to take individual legal action. The scheme is free for consumers to use.
The scheme operates in two parallel parts:
- Scheme 1: Agreements from 6 April 2007 to 31 March 2014 — implementation deadline 31 August 2026
- Scheme 2: Agreements from 1 April 2014 to 1 November 2024 — implementation deadline 30 June 2026
After those implementation deadlines, lenders must inform complainants whether they are owed compensation within three months. Consumers who have not complained will be contacted only if the lender identifies them as likely to be owed money — and that outreach does not happen until six months after the implementation period ends.
The takeaway: consumers who submit complaints now are in the first wave of payments. Those who wait may not receive contact from their lender until early 2027.
Which Lenders Are Affected?
The scheme covers all regulated motor finance lenders whose dealerships used undisclosed commission arrangements. Major lenders affected include Lloyds Banking Group (through Black Horse Finance), Santander UK, Barclays, Close Brothers, and MotoNovo. For a full list, see the lenders we claim against hub.
Who Can Claim?
To qualify, your agreement must meet all of the following conditions — use our PCP eligibility checker to confirm your position:
- Your agreement was PCP (Personal Contract Purchase) or HP (Hire Purchase)
- It was entered between 6 April 2007 and 1 November 2024
- Finance was arranged through a car dealership or broker
- A commission was paid by the lender to the dealer, which was not clearly disclosed to you
You do not need to have kept your paperwork. PCP Missold can locate your agreements using your name, address history, and approximate dates.
How Much Compensation Could You Receive?
The amount depends on your loan size, interest rate, agreement duration, and the type of commission arrangement. Our car finance compensation calculator explains the FCA's two-method framework — the hybrid remedy and the full commission repayment — with illustrative figures based on loan size and agreement date.
The FCA's 2019 review found typical overcharges of around £1,100 on a £10,000 agreement. With compensatory interest accruing at a minimum of 3% per annum from the agreement date, payouts for older agreements can be considerably higher.
What You Need to Do Now
Our simple guide to the PCP claims process walks through each step in detail, and our how it works page covers the process from instruction to payment. In summary:
- Check your eligibility — free, no documents needed
- Instruct PCP Missold — we locate your agreements and confirm commission type
- We submit your complaint to your lender under the FCA scheme
- We manage all lender correspondence and track your claim
- You receive your compensation offer and we advise on whether to accept
For a complete breakdown of when payments are expected, see our guide to the car finance claim timeline.
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