If you’d rather skip straight to checking whether you were affected by the supreme courts ruling on car finance claims, click here for Auto Justice, a brand of a firm which is authorised and regulated by the FCA. The Finance Review is not a regulated firm, but we’re happy to direct you where you can go. Now, if you’re still reading, here’s the full fact-check.
What Actually Happened and When
- On Friday 1 August 2025, after markets closed, the Supreme Court delivered
its judgment on the consolidated car finance claims cases, including Hopcraft v Close Brothers and Johnson v FirstRand (MotoNovo), among others. - The headline narrative from media outlets was loud: “consumers lost,”
“lenders won,” “£44bn liability averted.” For example:
- The Guardian called it a “blow to consumers” and wrote that the Supreme Court “spared lenders a potential £44 bn bill” (Guardian).
- The Times celebrated a triumph over “compensation culture,” arguing only genuinely mis-sold cases qualify (The Times).
- Financial Times emphasised relief for banks as a “reprieve” on compensation that could have reached tens of billions (FT).
These headlines are misleading. Yes, the scope of automatic, widespread claims was curtailed but it’s far from over.
The Ban on DCAs and the Scale of Impact
- Discretionary Commission Arrangements (DCAs) were where car dealers could hike the interest rate without telling you and pocket the extra as commission. This practice was banned by the FCA in January 2021, specifically from around 28 January 2021 (FCA announcement).
- Importantly, in the Supreme Court judgment the Johnson case was upheld under the Consumer Credit Act on the basis of an unfair relationship, which was driven in part by the excessive level of commission (around 55% of the credit charge) combined with poor disclosure and restrictive dealer-lender agreements. This highlights that commissio levels themselves can still be a wider issue going forward.
- Up to 40% of all car-finance deals before the ban were estimated to involve DCAs (Carwow).
That means millions of consumers might have been affected and may still be due compensation, even after the Supreme Court ruling.
Why the Headlines Got It Wrong (or Only Half Right)
- The Supreme Court did overturn two of the three test car finance claims cases and rejected broad fiduciary duties for dealers, hence the headlines of lenders “winning.” But:
- It upheld one compelling case that of Mr Marcus Johnson on the basis of an “unfair relationship” under the Consumer Credit Act.
- The Court provided guidance on when relationships are unfair for example, high commission relative to loan cost, disclosure shortfalls, and commercial ties limiting consumer choice leaving the door open to many individual cases.
- The FCA immediately signalled (and later confirmed) that it will consult on a redress scheme, estimating industry liability of £9 billion to £18 billion (Reuters).
So while the worst-case “£44 billion” scenario has been downgraded, a massive £18 billion is still expected to be made available for compensation only now in a more targeted, regulated scheme.
FCA Redress Scheme & What It Means
- The FCA has said it plans to publish a consultation in the coming months on how the compensation scheme should work covering who qualifies and how compensation will be assessed.
- The stated aim is to create a fair playing field for consumers while holding lenders to account.
- However, it’s important to note that the FCA has already delayed the complaints process once, pausing claims until December 2025, and has pushed announcements back in the past. So while progress is expected, the timeline isn’t guaranteed.
- Individual payouts are expected to average up to £950 per agreement, and many people had two or more finance agreements, meaning hundreds or even thousands of pounds could be due to you (FCA statement).
- The FCA’s action clearly indicates that widespread wrongdoing occurred, and hundreds of thousands or millions of customers may still be entitled to redress.
What You Should Do and How to Handle Car Finance Claims
- Don’t be misled by doom headlines. Yes, the ruling limits blanket claims but compensation is still very real and significant.
- You can claim for yourself for free. You may complain directly to your lender and then escalate to the Financial Ombudsman Service (FOS) if needed (FOS).
- \Make sure any claims firm is FCA-regulated or SRA regulated. The Finance Review is not a regulated firm, for regulated help, consider Auto Justice as one of the brands available to claim, but there are others. Ensure that the advert you see is clear that they are a regulated firm.
- Using a regulated claims brand, such as Auto Justice, has benefits:
- They can help you identify ALL of your agreements and potential claims from lenders quickly by entering just a few details online.
- They’re bound by regulatory standards unlike unregulated “claims firms” you may see advertising.
- But going direct is also valid. If you prefer, you can handle the entire claim process yourself at no cost.
- You might want to Act now. Complaints involving DCAs are on pause until Dec 2025 but that doesn’t prevent you from starting the process now. Once the FCA scheme launches, early action might help.
PCP Car Finance Claims Myths
Claim Myth | Fact (What Really Happened) |
“Consumers lost, lenders won.” | Lenders won in two of three test cases but one strong judgment remains. |
“No compensation is coming.” | Up to £18bn is still earmarked for consumers. |
“Recent changes mean no claims are valid.” | 40% of car finance deals before 2021 involved banned DCAs millions could still claim. |
“You must use a claims firm.” | You can claim for free. But if you do use a firm, ensure it’s FCA-regulated. |
“Claims are too complex.” | Regulated firms like Auto Justice make it easy, just fill in a few details. |
Final Word on Car Finance Claims
Don’t believe the headlines that say “motorists lost.” They sold you only half the story.
£18 billion is still expected to be paid out. If you financed a car before January 2021, there’s a real chance thousands of pounds in compensation could be coming your way.
Check if you were effected, and find your agreements, by clicking here for Auto Justice, and start your eligible claim safely through a regulated channel.
Sources & Further Reading
- Guardian: Supreme Court hands partial win to car finance companies
- The Times: Common sense triumphs over compensation culture
- FT: UK Supreme Court gives banks reprieve on car finance commissions
- Reuters: FCA proposes redress scheme of £9bn – £18bn
- FCA press release: Ban on discretionary commission models
- Carwow: Supreme Court ruling on car finance
- FCA statement: Motor finance review next steps
- Financial Ombudsman Service

Stephen Dale heads the Editorial Team at The Finance Review.
We turn complex UK tax, pension and property rules into plain English so you can make informed choices.
Our articles are educational only and should not be taken as personal advice.
If you need tailored guidance, we can introduce you at your request to FCA authorised advisers, solicitors or chartered accountants who specialise in your situation.
Important: Stephen is a professional content strategist, not a regulated financial adviser or solicitor.