Car finance claims, in plain English
The terms, regulators, and finance products that come up during a UK motor finance claim — explained without the jargon. Cite-friendly definitions, written for claimants and the curious.
Every term below is written to the same shape: a one-sentence plain-English definition, a short explanation, why it matters for your claim, and links to related terms. Sources are the FCA, the Financial Ombudsman Service, the UK Supreme Court rulings, and the operative claims handbook used by our regulated complaints team. No payout numbers, no hype — just the bits you need to follow what's happening when you read a letter from a lender.
How a claim works
The specific arrangements and legal mechanics that make a car finance claim viable.
- Discretionary Commission Arrangement (DCA) A pre-January-2021 arrangement that let car dealers and brokers raise the interest rate on your PCP or HP agreement, earning a bigger commission from the lender for doing so. You were never told. The FCA banned DCAs on 28 January 2021.
- Hidden commission Money paid by a lender to a dealer or broker for arranging your car finance, without the size or existence of that payment being disclosed to you. UK courts have ruled that undisclosed commission can make a credit relationship legally unfair.
- Section 140A — the unfair-relationship test (s.140A) A section of the Consumer Credit Act 1974 that lets a UK court examine whether a credit agreement is unfair to the borrower. In 2025, the UK Supreme Court held in Johnson v FirstRand that a motor finance relationship was unfair where important commission and lender-tie information was not properly disclosed.
Finance products
The finance products you may have signed up to — typically PCP or HP.
- Hire Purchase (HP) A type of UK car finance where you pay fixed monthly instalments and automatically own the car at the end. Unlike PCP, there's no balloon payment and no return option. HP agreements are eligible for the same DCA and hidden-commission claims as PCP.
- Personal Contract Purchase (PCP) A type of UK car finance where you pay monthly toward part of the car's value, with a large optional 'balloon' payment at the end. You can buy the car, hand it back, or trade it in. PCP was the most common DCA-affected product.
Routes to redress
The pathways through which compensation is currently being handled.
The regulators
The UK bodies that authorise, supervise, and adjudicate motor finance complaints.
- Financial Conduct Authority (FCA) The UK's regulator for consumer finance, including motor finance. The FCA writes the rules lenders and credit brokers must follow, supervises firms in the market, and enforces breaches — including the ongoing motor finance redress scheme.
- Financial Ombudsman Service (FOS) An independent, free public service that resolves disputes between UK consumers and financial firms. If a lender rejects your motor finance complaint or doesn't respond in time, you can escalate to the FOS — at no cost to you.
Process & paperwork
The steps, checks, and documents that come up while a claim is in flight.
- Soft credit search A check that lets a firm look at parts of your credit file without leaving a footprint visible to other lenders. Total Claim's 60-second eligibility check uses a soft search — your credit score is not affected.
- Success fee A fee charged only if a claim succeeds. UK claims management companies regulated by the FCA work within a capped fee range — at Total Claim, the success fee is 18–36% including VAT, charged only on the redress amount we recover for you.