Car Finance Commission Claims – What’s Going On in the Supreme Court?
- The Claims Guide
- Apr 8
- 3 min read
If you’ve heard about hidden commissions in car finance recently, you’re not alone. Many people are starting to ask whether they were misled when they took out car finance, especially if they went through a dealership. A major court case has just finished in the UK’s Supreme Court, and the decision could unlock compensation for hundreds of thousands of borrowers.
Let’s break down what it’s all about, and what it could mean for you.
This Is About Hidden Commissions - Not DCA Claims
Most people are aware of Discretionary Commission Arrangements (DCAs). These were the deals where a car dealer could set the interest rate and earn more commission by charging you more. These were banned by the Financial Conduct Authority (FCA) in 2021 because they were clearly unfair.
But the case that’s just been heard in the Supreme Court is about something much broader and could affect millions more people:
Whether a car dealer or broker should have told you how much commission they were earning from the lender—and what happens if they didn’t.
This is about hidden commissions, even if the commission amount was fixed. The question is whether you were properly informed and whether the finance deal was truly fair.
What’s This Supreme Court Case About?
The case involves three customers: Johnson, Wrench and Hopcraft. They all bought cars using finance arranged through dealerships. In each case, the lender paid a commission to the dealer, but the customers say they weren’t properly told this.
They argue that:
The dealer was acting like a broker and should have told them about the commission,
The dealer may have been putting their own interest (earning commission) ahead of the customer’s,
That made the agreement unfair and they want compensation or refunds.
The lenders (including FirstRand and Close Brothers) disagree. They say:
The dealers weren’t acting as the customer’s trusted advisor,
Commissions are normal in the industry,
And the customers signed the agreement voluntarily.
⚖️ What Happened in Court?
The Supreme Court case lasted three days and finished in early April 2025. The five judges heard arguments from:
The lenders,
The customers’ lawyers,
The Financial Conduct Authority (FCA), which supports some customer protections.
The core legal question is:
Did the dealer owe the customer a special duty (like a financial adviser would), and does not telling the customer about the commission make the agreement unfair or unlawful?
The judges will now consider the case and are expected to give their ruling by July 2025.
What Is the Likely Outcome?
Most legal experts and people watching the case think the most likely outcome is this:
The court will say dealers are not full fiduciary advisers (i.e., they don’t owe the same duty of care as a lawyer or financial adviser).
BUT they may still agree that if the commission was hidden or very large, that made the agreement “unfair.”
If that happens, it could trigger a wave of compensation claims—possibly through a formal scheme.
This would be similar to what happened with PPI (Payment Protection Insurance) in the past. Even if the product was legal, the lack of transparency could lead to redress.
💷 What Might You Be Owed?
If your car finance agreement included a commission that wasn’t clearly explained, you may be eligible for:
A refund of the commission, which is often £500–£1,000,
Possibly some of the interest you paid on that commission,
And in rare cases, a full or partial refund of the finance agreement.
You don’t need to have been “ripped off” to claim. The key question is:
Did you know how much commission the dealer was paid—and were you in a fair position to make an informed decision?
Bottom Line
This Supreme Court case could be a turning point for consumers who were kept in the dark about commissions in their car finance deals. If you bought a car using finance through a dealership in the last 10 years, it’s worth checking if you could be owed money.
We’ll keep you updated as the judgment comes in—but you can get ahead now by checking if your agreement qualifies.
It costs nothing to find out.
You do not need to use a claims management company to make your complaint to your lender. If your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.
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