Motor finance and PCP: what happened and how the UK scheme works

What PCP motor finance is

A personal contract purchase is a way to finance a car. The buyer pays a deposit and monthly instalments, and at the end chooses between paying a final sum to keep the car, handing it back, or trading it in. A very large number of UK drivers have used PCP and other forms of motor finance, and most of those agreements were arranged at a dealership or by a broker who was paid commission by the lender.

Why commission became a claims issue

The concern was not that commission existed. It was how some commission arrangements worked and whether customers were told about them. In a discretionary commission arrangement the broker could adjust the interest rate offered to a customer in order to earn a higher commission. Other arrangements involved very high commission, or a commercial tie between a dealer and a lender that the customer was not told about.

On 1 August 2025 the Supreme Court gave judgment in Johnson v FirstRand, with the linked cases Wrench and Hopcraft, reported as [2025] UKSC 33. The Court held that dealers arranging finance do not owe customers fiduciary duties, and it rejected the bribery arguments. It did uphold Mr Johnson's claim that the relationship was unfair under section 140A of the Consumer Credit Act 1974, because of the size of the commission, the failure to disclose it and the concealment of the tie between dealer and lender. The Court stressed that unfairness depends on the facts of each case.

The FCA redress scheme

After a consultation that opened in October 2025, the Financial Conduct Authority published its final rules in policy statement PS26/3 on 30 March 2026. The scheme covers motor finance agreements made between 6 April 2007 and 1 November 2024 that involved a discretionary commission arrangement, a high commission arrangement or a tied relationship, subject to exceptions. Agreements with very low commission, or on which no interest was charged, are not covered. Consumers whose complaint has already been decided by the Financial Ombudsman Service or a court, or who have accepted redress, are outside it.

Lenders were required to start contacting affected customers from 30 June 2026 for agreements made from 1 April 2014, and from 31 August 2026 for earlier ones. Redress is calculated in one of two ways, and for cases that closely match the Johnson facts it is the commission plus interest. The scheme is free for consumers to use.

The scheme has been challenged. On 2 July 2026 the Upper Tribunal suspended parts of it on terms agreed between the FCA and four challengers, and firms must comply with the rules that are not suspended. The position can change, so anyone affected should check the FCA's own pages for the current state of play.

What this means for consumers

The FCA scheme does not require a consumer to use a claims firm or a solicitor. A person who decides to use one should check that the firm is authorised, using the FCA Register for claims management companies and the SRA's register for solicitors, and should understand any fee before agreeing to it. Information on this site is general and is not advice about any individual's agreement.

Where the group fits

Brogen Macy International licenses digital brands and platform technology to regulated businesses that work in this market. YourSolicitor.co.uk is the group's established UK legal brand, and the platform behind it, built by Costello Global Technology, provides plain-English information, recorded consent and a clean handover to the regulated firm. The group does not handle claims, give advice or receive redress on anyone's behalf.

The model is the same one the group applies to YourSolicitor.com, and it is described in full on the claims sector page. The brands themselves are part of the group's domain name portfolio, within a wider group that is privately held and based in Dubai.

How we write about it

Rules and dates on this page come from the regulator's own publications and the Supreme Court judgment, and are checked before each update. We do not state how long any individual case will take or what any individual will receive, because neither can be known in advance.