If you took out car finance in the last few years (or even longer ago), there’s a decent chance you were never told the full story about how the deal was put together.

And here’s the uncomfortable bit: commission can sit right in the middle of it.

In plain English, commission is the money a lender pays to a broker or dealership for arranging your finance. That isn’t automatically “wrong” on its own — but when the commission isn’t properly disclosed, or when it influences the interest rate you were given, it can tip a finance agreement into unfair territory.

That’s why complaints about motor finance commission have surged in the UK, with the Financial Ombudsman Service reporting major rises in this area and record complaint volumes overall.

If you’re wondering whether your PCP, HP or dealer-arranged finance deal was mis-sold, this guide will walk you through the red flags, what to check, and what to do next.

What “hidden commission” actually means

When you sign a car finance agreement, you usually assume the numbers are the numbers, the APR is based on your credit profile, the lender’s criteria, and that’s that.

But historically, some commission structures created an incentive to push your rate up.

A well-known example is discretionary commission arrangements (DCAs) — where the broker/dealer could earn more by selling you a higher interest rate. The FCA banned DCAs in 2021 because of the risk they created for consumers.

Hidden commission problems tend to fall into a few buckets:

• You weren’t told commission was being paid at all (or it was buried in vague wording).

• You weren’t told the amount (or how it was calculated).

• The commission affected your interest rate or overall cost, and you weren’t given fair transparency.

• The sales process pushed you into a deal that benefited the seller more than you.

The FCA has been reviewing motor finance commission issues, and complaint handling rules have been temporarily adjusted while this area is being addressed at a regulatory level.

Why this matters

Even a small change in APR can snowball.

If your rate was nudged up to increase commission, you could have paid:

• More interest every month

• A higher total repayable

• Potentially higher fees over the life of the agreement

And when you’re talking about a car finance term of 3–5 years (sometimes longer), that adds up fast.

On top of that, motor finance is a huge UK market — and it’s the scale that’s driving so much attention right now. The Finance & Leasing Association publishes regular updates showing ongoing strength in consumer car finance volumes and value.

10 signs your car finance deal may have been mis-sold

You don’t need to be a finance expert to spot the warning signs. Start here.

1) You were never told the dealer/broker was being paid by the lender

If commission wasn’t mentioned at all — verbally or clearly in writing — that’s a major red flag.

2) The paperwork uses vague language like “we may receive a payment”

Some agreements hide behind woolly wording that doesn’t explain what’s actually happening.

3) Your APR felt high compared to what you expected

If you had decent credit but still got a surprisingly high rate, it’s worth checking whether the deal was priced fairly.

4) You weren’t offered different lender options

If the dealership steered you to “one lender only” without explanation, that can suggest the choice was commission-driven.

5) You were rushed through the finance discussion

A quick “sign here, it’s standard” approach often goes hand-in-hand with poor disclosure.

6) The salesperson focused on monthly payments only

If you were kept away from APR and totally repayable, that’s not a great sign. Monthly payments can be made to look affordable while the overall cost is quietly inflated.

7) You were told the rate was “the best available” without any proof

If you weren’t shown comparisons, you couldn’t realistically challenge it.

8) Your finance was arranged at the dealership (broker-style), not directly with a lender

Dealer-arranged finance is one of the common places commission comes into play.

9) You weren’t asked the right affordability questions

A sloppy affordability check can be part of a wider pattern of poor practice.

10) You’ve since learned others got better rates on similar deals

If friends/family with similar credit profiles got significantly better APRs, it’s worth digging into why.

How to check if commission was involved

You can usually start with what you already have.

Step 1: Find your finance documents

Look for:

• The finance agreement

• Any “pre-contract information” or credit proposal

• Emails or paperwork from the dealership/broker

• A breakdown of fees/charges

Step 2: Scan for commission wording

Search for words like:

• “commission”

• “broker fee”

• “payment from lender”

• “remuneration”

• “introducer”

Step 3: Look at the APR and total amount payable

If the APR looks high for your credit profile, that alone doesn’t prove mis-selling but it’s a reason to investigate.

Step 4: Get help reviewing it properly

This is where specialist support matters. Claim First’s process is designed to be straightforward — you share your finance details, their team reviews your agreement for signs of mis-selling, and they handle the claim if you’re eligible.

If you want to see how they approach it, you can start here:

• Mis-Sold PCP Finance

• All Services

“But my deal was PCP… does this still apply?”

Yes. PCP is one of the most common types of car finance where people now have questions about commission and disclosure.

It’s not just PCP either — HP and other dealer-arranged agreements can be affected too.

The key is how the deal was sold to you and what you were told (or not told).

What you might be able to claim back

This depends on your agreement and the circumstances — but the whole point of making a complaint or claim is to recover money if you were treated unfairly.

Claim First states that successful refunds for mis-sold finance claims could typically fall in the £1,500–£5,000 range (depending on the agreement and what went wrong).

Just keep in mind: every case is different, and outcomes depend on the facts.

What’s happening in the UK right now (and why you might hear about “pauses”)

Motor finance commission has been under the spotlight, with the FCA reviewing historic practices and making changes to complaint-handling timelines while it works through next steps.

That doesn’t mean you can’t take action — it means the wider system is dealing with a high volume of issues and working out how redress should operate.

The Financial Ombudsman Service has also highlighted that motor finance commission is one of the areas driving big increases in complaints.

How Claim First can help (without the stress)

If you’re reading this thinking, “I’m not sure, but something felt off” — you’re exactly the kind of person who should get it checked.

Claim First’s whole vibe is simple:

• No win, no fee

• No stress

• Clear steps

• A team that handles the heavy lifting

FAQs: Hidden commission & mis-sold car finance

1) Is commission on car finance illegal in the UK?

No — commission itself isn’t automatically illegal. The issue is whether it was properly disclosed and whether it made the agreement unfair.

2) I signed paperwork. Doesn’t that mean I agreed to it?

Not necessarily. If key information wasn’t presented clearly (or the sales process was misleading), signing doesn’t wipe that away.

3) What if I can’t find my original agreement?

That’s common. You can still start the process — you may be able to retrieve documents through the lender or broker, and a claims team can guide you on what’s needed.

4) Will making a claim affect my credit score?

Generally, making a complaint/claim about how a finance agreement was sold to you shouldn’t affect your credit score by itself. Claim First also states that making a legal claim through them does not affect your credit score or financial standing.

5) Does this apply if my deal was years ago?

It can. The FCA’s review and the volume of complaints include agreements from earlier periods, and the focus is on whether the relationship and disclosure were fair.

6) How long does a claim take?

It varies. Claim First notes most claims are resolved within a few months, but timing depends on complexity and the wider complaint-handling environment.

Ready to check your car finance deal?

If you think your car finance commission may have been hidden or you were pushed into a higher-rate deal without a clear explanation don’t ignore that gut feeling.

You don’t need to argue with the dealership. You don’t need to decode finance jargon. You just need the right team to look at your agreement and tell you where you stand.

Start your Mis-Sold PCP Finance check today with Claim First: Mis-Sold PCP Finance

Or if you’d rather speak to someone first: Contact