A perspective on Motor Finance Commission
The motor finance in the UK is currently navigating a complex landscape of regulatory changes and legal challenges, particularly concerning commission payments. This has significant implications for lenders, brokers, and consumers…
The FCA is amidst investigation; in the process of concluding the Skilled Person Review and is also awaiting several landmark regulatory decisions:
Between April 2003 and January 2021, for motor vehicles purchased using Car Finance the lender and Brokers had a ‘Discretionary Commission Arrangement’ It allowed the Brokers set their own interest rates, within a predefined range set by the Lender. In effect, earn bigger commissions at the expense of the Consumer. Since 2021, and after FCA ban, the industry has adopted a regulated fixed-fee model
A High Court ruling in favour of the (FOS) in its decision to uphold a complaint relating to DCAs against a major UK Bank. Permission to appeal has been granted with a decision expected by December 2025
The Supreme Court Concluded its appeal hearing in July 2025 concerning a landmark ruling by the Court of Appeal against car dealership and FIs, Instructing FCA to establish and embed Redressal Scheme – Transparency, Fairness, Market Equilibrium
Operational & Compliance challenges
Likelihood of Litigations , Reputational damage and need for improved systems and process for proactive Redressal underpinned by a strengthened Ops-Reg Framework
Potential for broader industry impact
The risk of the Johnson ruling being applied across other sectors remains; Non DCA Motor transparency, Personal Loans and Credit Cards, Mortgage Endowments and others
Firms need to act now, to be ready
Motor registration and Car Finance (PCP) trends in the UK Conservatively 1.5Mn private motor were registered from 2007 onwards every year, of which c.50% were financed between 2007-2015 and after which financing jumped to >75%
Key dimensions of the solution
Data scope: Agreement level information | Enrichment to address data gaps | PII enabling customer identification and contact
Operational Management and Control: Ownership | Data integrity | In line with CBL data governance standards
Operations: Data to support | Complaints mgmt. | Remediation | Enquiries | API driven | Real-time access
To drive sustainable outcomes
- >50% Efficiency, Flex capacity, Scalable
- Minimal Ageing, 3-5 Days Setup to Settlement
Proactive and Continuous engagement with the
- Enhanced CX, Opportunity to convert; New Business, X/Up- Sell
- Agility to change basis Reg. guidance, shifting trends and sentiment dynamics
The UK’s biggest consumer help website MoneySavingExpert.com now has 1.08M complaint letters submitted since 6 February 2024 to 11 March 2024, in a little over 30 days That equates to a staggering 30,000 per day. A back-of-the-envelope calculation at £1,100 per consumer means this could be at least £480Mn back for those consumers, or more, as over 25% of complaints are from people with multiple agreements. And that is just the Tip of the Iceberg !
The FCA is expected to confirm it’s plans on introduction of a redressal scheme, 6 weeks from end of July (Supreme Court judgment) and would be guided by a number of principles including:
Fairness – compensation calculated and set at a "fair" level for both consumers and firms
Simplicity and cost effectiveness – making it easy for consumers to take part, cost of delivering the scheme are "proportionate" for firms
Transparency – clear explanations of decisions for consumers, as well as publishing data to highlight the progress of the scheme
Enquiries to the MoneySavingExpert website in a little over 30 days timeframe
| Lender | Proportion of Complaints |
| Black Horse (includes Jaguar, Land Rover and Suzuki) | 16.1% |
| Volkswagen Financial Services (includes Audi, Seat and Skoda) | 14.1% |
| Stellantis Financial Services (includes Citroen, Fiat, Peugeot and Vauxhall) | 8.4% |
| Santander (includes Hyundai, Kia and Volvo) | 8.2% |
| BMW Financial Services (includes Mini) | 7.4% |
| MotoNovo | 6.8% |
| Mobilize (includes Renault, Nissan and Dacia) | 4.3% |
| Ford Credit Europe | 4.3% |
| Mercedes Benz Financial Services | 3.6% |
| Barclays Partner Finance | 3.1% |
| Alphera | 3.1% |
| Toyota Financial Services (includes Lexus) | 2.5% |
| Close Brothers | 2.4% |
| Northridge | 2.4% |
| Blue Motor Finance | 1.1% |
Happy to take questions
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