Martin Lewis issues ‘landmark’ car finance misselling update

Martin Lewis has issued ‘landmark’ update to everyone who bought a car before 2021 using a finance agreement.

At the beginning of 2024, Lewis took to his ITV show The Martin Lewis Money Show Live to explain that there was a massive investigation under way in to the way car finance had been sold before 2021 in the United Kingdom.

Concerning vehicle finance deals that were taken out by individuals between 2007 and 2021 for the likes of cars, vans, motorbikes, and even camper vans, people across these 14 years had not been told the interest rates on their agreements were being increased.



In 2021, the Financial Conduct Authority (FCA) ruled that this was unfair and banned the practice – known as discretionary commission agreements (DCAs) – outright.

With around 40 percent of finance deals in this time period using DCAs, it is now thought that billions could be owed to Brits in compensation as the FCA continues to investigate the issue.

With a ruling from the FCA expected in spring 2025, which will decide what compensation could be paid out to people, Lewis has taken to his latest Money Saving Expert (MSE) newsletter to issue a ‘landmark’ update to the proceedings that could mean you’re more likely than ever to get some money back.

Put a claim in ASAP if you haven’t already, Martin Lewis says (James Stack / BBC / Comic Relief via Getty Images)

“A shock exploded through the car finance world on Friday, as the Court of Appeal issued a precedent-setting ruling favouring consumers over finance firms,” Lewis says.

“That means this is now the law, though if it goes to a Supreme Court appeal, that could take a different view and overrule it. Simplifying somewhat.

“The verdict was unambiguous and said a car sales firm couldn’t lawfully receive commission from a finance firm unless it had the customer’s ‘fully informed consent’. And to have this ‘fully informed consent’ the consumer would need to be told all material facts, including the calculations and amount of commission. Wow.”

Lewis said that the ruling increases your chances of getting compensation over your car finance claim.

He says: “One reason the FCA extended its reporting deadline from September 2024 to May 2025 was to watch if the courts ruled in consumers’ favour, as if so, its own rulings would be less likely to be overturned if firms challenge it in court.”

Billions could be paid out in compensation (Getty Stock Images)

Can I make a claim?

You can submit a car finance claim over a potential DCA if you meet the following criteria:

The vehicle you took finance out for was a car, van, motorbike or camper vanThe finance deal was taken out between April 2007 and 28 January, 2021The vehicle was for personal use (including commuting to work)The finance was either personal contract purchase (PCP) or hire purchase (HP) – but importantly, it cannot have been personal contract hires

You can claim on behalf of someone who has died if you are the executor of their will or the beneficiary. You also don’t have to still own the car to make a claim.

With the ruling expected soon, if you haven’t made a claim, do it as soon as possible as you can’t claim after the ruling is given. This is expected to be in May 2025.

The likes of Lloyds, which owns finance lender Black Horse, has already put aside £450 million in reserves ahead of the ruling.