Millions of UK car buyers were mis-sold finance agreements between 2007 and 2021 — and most of them had no idea it was happening. The mis-selling was hidden by design: a secret arrangement between lenders and dealers that inflated the interest rate on customers' finance without their knowledge. Here are the seven key signs that you may have been a victim.
What Is Car Finance Mis-Selling?
In the context of the FCA's investigation, car finance mis-selling refers specifically to the undisclosed use of discretionary commission arrangements (DCAs). Under a DCA, the car dealer was allowed to set the interest rate on your finance agreement within a range set by the lender — and earned a higher commission the more they inflated the rate.
This created an obvious conflict of interest: the dealer was supposed to be acting in your interest, but was financially motivated to charge you as much as possible. Crucially, this arrangement was never disclosed to customers — you had no way of knowing the dealer had inflated your rate. The FCA confirmed this constituted unfair treatment and banned DCAs in January 2021.
For a full explanation, see our guide: What Is a Discretionary Commission Arrangement?
7 Signs Your Car Finance Was Mis-Sold
The Finance Was Arranged at the Dealership
If the car salesperson arranged your finance on your behalf at the point of sale — filling in forms, getting a decision, and presenting you with an agreement to sign — this is the classic DCA scenario. Almost all dealer-arranged finance from 2007 to 2021 used DCAs.
No One Mentioned a Commission Arrangement
Were you ever told that the dealer was receiving a commission from the lender — and that they had the power to set your interest rate? If not (and in almost every case, customers were not told this), this is a sign of a DCA.
You Were Given a Rate Without Explanation
Was your interest rate simply presented to you as a fact, without any explanation of how it was calculated or why? In a transparent arrangement, you should have been able to see that the rate was fair and independently set. If it was just announced to you, the dealer may have inflated it.
You Signed Quickly and Didn't Have Time to Compare
Dealers using DCAs often pushed customers to sign finance agreements quickly — before they could compare rates from other sources. If you felt rushed or pressured to commit to finance on the same day, this is a warning sign.
Your Finance Was With a Major Lender (Black Horse, Santander, Close Brothers, MotoNovo)
While DCA mis-selling was widespread across all lenders, the largest provisions have been set aside by Black Horse (£1.95bn), Close Brothers (£400m), and Santander (£295m). If your finance was through any of these — or through any major UK motor finance provider — the probability of a DCA being in place is very high.
Your Interest Rate Seemed High
At the time, it may have seemed normal that car finance carried a relatively high interest rate — perhaps 8%, 12% or even higher. In many cases, these rates were inflated well above what the lender's base rate would have been without dealer discretion. If your APR was in double figures, you may have been significantly overcharged.
You Had Finance Between April 2007 and January 2021
This is the defining criterion. The FCA's investigation covers all agreements within this date range where a DCA was in place. If your agreement falls within this window and was dealer-arranged PCP or HP, the DCA was almost certainly active.
Think You Were Mis-Sold? Check Free in 60 Seconds
No documents needed. No Win No Fee. Deadline: 29 July 2026.
Check My Eligibility FreeWhat If You Had No Problems With Your Finance?
Many people assume they cannot claim because they never missed a payment, were satisfied with their car, or didn't feel anything was wrong at the time. This is a misconception. The mis-selling is about what was hidden from you — not about your experience of the agreement. Even a customer who was perfectly happy with their car and made all their payments on time could have been paying hundreds or thousands more than necessary due to a hidden inflated commission.
To understand your eligibility in full, read: How to Check If You're Eligible for a PCP Claim or visit our full claims guide.