Reclaim a refund on mis-sold hire purchase (HP) car finance
Hire purchase (HP) is one of the most common ways to buy a car: you pay in instalments and own it after the final payment. Like PCP, many HP deals arranged through a dealer or broker carried a commission the lender paid them, and often the broker could nudge your interest rate up to earn more, a discretionary commission arrangement. If that was never properly explained, your credit relationship may have been unfair and you could be owed money. You can complain directly and for free, and you keep every penny of any refund.
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Your rights
Hire purchase is regulated credit under the Consumer Credit Act 1974. Sections 140A-140C let a court, and the Financial Ombudsman, decide that the relationship was unfair, for example because of an undisclosed commission, and order redress. The FCA's consumer redress scheme covers motor finance agreements, including HP, taken out between 6 April 2007 and 1 November 2024. Lenders have until 31 May 2026 to issue final responses to complaints. If your final response is sent between 12 July 2023 and 29 January 2026, you have until the later of 29 July 2026 or 15 months from the final response to refer your complaint to the Financial Ombudsman Service. For final responses sent on or after 30 January 2026, you have the usual six months to refer it. You can escalate for free to the Financial Ombudsman Service if the lender rejects your complaint or does not respond within the deadline.
Step by step
- 1Find your HP agreement and confirm the lender, the broker or dealer, the APR, the term and the dates, and that it falls between 6 April 2007 and 1 November 2024. If you cannot find it, ask your lender for a copy.
- 2Write to the lender named on the agreement to complain that commission paid to the broker was not properly disclosed, making the relationship unfair under sections 140A-140C of the Consumer Credit Act 1974.
- 3Request that they confirm the commission type and amount and refund any overpaid interest plus compensatory interest, and ask them to log it under the FCA motor finance redress scheme.
- 4Wait for the lender's final response. They have until 31 May 2026 to respond to complaints under the FCA scheme. If they do not respond by then, or reject your complaint, you can escalate to the Financial Ombudsman Service.
- 5Refer your complaint to the Financial Ombudsman Service for free. If your final response was sent between 12 July 2023 and 29 January 2026, you have until the later of 29 July 2026 or 15 months from the final response. For final responses sent on or after 30 January 2026, you have six months to refer it.
What they'll say, and your comeback
“Hire purchase is different from PCP, so the commission rules do not apply to you.”
Comeback, Both HP and PCP are regulated motor finance under the Consumer Credit Act 1974 and both are covered by the FCA redress scheme. The issue is the undisclosed commission, not the label on the product.
“You have already paid off the car, so there is nothing to reclaim.”
Comeback, Settling the agreement does not remove my right to redress for an unfair relationship. The complaint is about commission I was overcharged through, and that is reclaimable whether the agreement is live or finished.
What actually happens
In practice, the process for reclaiming mis-sold HP finance involves a complaint to your lender first. Due to the FCA's temporary complaint handling rules, lenders have until 31 May 2026 to issue their final responses to these complaints. This means you may face a significant wait for a decision. If the lender rejects your complaint or fails to respond by the deadline, you can then escalate your case to the Financial Ombudsman Service. The deadline for referring to the Ombudsman varies: if your final response was sent between 12 July 2023 and 29 January 2026, you have until the later of 29 July 2026 or 15 months from the response. For final responses sent on or after 30 January 2026, you have six months to refer. While the specific redress amounts vary widely depending on your finance agreement, the Ombudsman will assess each case individually to determine appropriate compensation.
FAQ
What is the difference between a discretionary and a non-discretionary commission claim?
A discretionary commission arrangement let the broker increase your interest rate to earn more; the FCA banned these on 28 January 2021. Even non-discretionary commissions can be reclaimable if they were high and not properly disclosed, as in the Johnson v FirstRand Supreme Court case. Complain either way and let the lender check.
What evidence do I need?
Your finance agreement is the main thing. You do not need to prove the commission amount yourself; the lender holds that information.
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Sources
A self-serve tool, not a law firm. General information, not legal advice. Last researched 2026-09-21.