Millions of UK motorists who had hoped to file a claim for compensation for hidden car finance commissions are now out of luck thanks to a recent Supreme Court decision. The scope of claims that drivers can pursue has been restricted by the decision, which was made in 2025. However, based on the specifics of their agreements, some customers may still be eligible for payments.
What Was the Controversy About?
Many motorists have financed automobiles through personal contract purchase (PCP) or hire purchase (HP) agreements over the past two decades. Brokers or dealerships frequently received commissions from lenders that were not made clear to customers. Campaigners argued that this was unfair practice. Drivers who did not realize that a portion of their payment was going directly to the broker as commission in some instances ended up paying higher interest rates. This resulted in an increase in legal claims, with some motorists anticipating refunds totaling thousands of pounds. The Decision of the Supreme Court The Court decided that not all arrangements involving hidden commissions were illegal.
The main points included:
If the finance paperwork stated that a commission might be paid, even in general terms, this could count as disclosure.
Only agreements in which customers were actively misled or in which there was no disclosure at all can still lead to successful claims. What was considered normal practice in the industry at the time will also be taken into account.
This means that the majority of motorists will no longer qualify for automatic refunds.
Who Might Still Qualify for Reimbursement?
Even though the majority of claims have been denied, there are still some circumstances in which drivers may have a case: If you were never told about commissions in any form.
If you were told there were no commissions but this was untrue.
If the interest rate you paid was increased directly to boost commission.
If you were a vulnerable customer who was not given a fair explanation of costs.
These circumstances may still allow a claim, but each case will need to be assessed individually.
How This Affects Drivers Between
the beginning of the 2000s and the year 2021, advertisements promoting hidden commission refunds may have been seen by anyone who financed a car. Following the ruling, most of those drivers will not be able to move forward with claims.
Having said that, if you were never informed about commissions, it is important not to assume you have no chance. Obtaining legal counsel and reviewing your documents remains the best strategy. Helpful Advice Check your finance agreement to see if there is a mention of commission. Ask your lender for a full breakdown of your deal.
Find independent legal counsel to determine whether your case qualifies.
Conclusion
Although the ruling by the Supreme Court has limited the scope of claims based on hidden commissions, it does not completely exclude them. While millions of drivers will now miss out on payouts, some customers may still receive compensation where disclosure was missing or misleading. If you want to know if you’re still eligible, the key is to review your paperwork and seek expert advice.
