What It Means for Drivers Across the UK

The Supreme Court delivered its car finance decision, shaking up the motor finance industry. After months of legal scrutiny, the highest court in the UK delivered its ruling in a case that could affect millions of car finance agreements.

Although some lenders breathed a sigh of relief, the Supreme Court car finance decision is far from the end of the matter. In fact, many drivers may now be in a stronger position to claim compensation.

Here’s what the car finance ruling means for you, and how you can check if you’re owed money.

What Was the Car Finance Case About?

In August 2025, the UK Supreme Court ruled on three combined appeals (Hopcraft, Wrench, and Johnson) involving mis-sold car finance agreements, specifically focused on undisclosed commissions paid by lenders to car dealers.

The list below sets out the basis of each claim.

1. Hopcraft v Close Brothers Ltd

Claim: Amy Hopcraft claimed she entered a hire-purchase deal in 2014 without being told that the dealer would receive commission from her lender, Close Brothers. She claimed this secret commission breached a fiduciary or loyalty duty.

2. Wrench v FirstRand Bank Ltd (MotoNovo)

Claim: Andrew Wrench brought two hire‑purchase agreements (2015, 2017) claiming undisclosed dealer commissions influenced the interest rate offered—again implying a breach of loyalty.

3. Johnson v FirstRand Bank Ltd (MotoNovo)

Claim: Marcus Johnson argued that the dealer received an exceptionally large commission—£1,650.95 (≈ 25% of car cost, 55% of total credit charge) – paid without his knowledge, rendering the relationship unfair under Section 140A of the Consumer Credit Act 1974.

What Did the Car Finance Supreme Court Ruling Say?

1. Hopcraft v Close Brothers Ltd

Claim: Amy Hopcraft alleged she entered a hire‑purchase deal (2014) without being informed that the dealer would receive commission from her lender (Close Brothers). She claimed this secret commission breached a fiduciary or loyalty duty.

Supreme Court outcome: The Court dismissed her claim, ruling that car dealers don’t owe consumers a fiduciary duty when arranging finance. It viewed the transaction as a commercial sale linked to a retail purchase, not a standalone advisory service.

2. Wrench v FirstRand Bank Ltd (MotoNovo)

Claim: Andrew Wrench brought two hire‑purchase agreements (2015, 2017) claiming undisclosed dealer commissions influenced the interest rate offered, again implying a breach of loyalty.

Supreme Court outcome: His claims were rejected on the same basis: no fiduciary duty, no tort of bribery. The court ruled that non‑disclosure of standard commission was not unlawful absent unfairness, and that dealers are not “agents” owing loyalty in these bundled sale/finance transactions.

3. Johnson v FirstRand Bank Ltd (MotoNovo)

Claim: Marcus Johnson argued that the dealer received an exceptionally large commission – £1,650.95 (≈ 25% of car cost, 55% of total credit charge) – paid without his knowledge, rendering the relationship unfair under Section 140A of the Consumer Credit Act 1974.

Supreme Court outcome: Allowed in Johnson’s favour. Although the Court agreed there was no fiduciary duty or bribery, it nevertheless ruled that unfair relationship provisions applied. The lender charged a commission so large and unclear that it treated Johnson unfairly and must repay the commission with interest.

Summary Table

Broader Implications

The Supreme Court significantly narrowed the scope of redress. Most mis‑sale claims now fail, especially where dealer-paid commissions were standard and moderate.

Only exceptional cases, where brokers failed to disclose large commissions relative to the credit cost, are likely to qualify under the Consumer Credit Act.

Regulators like the FCA may still pursue compensation via a redress scheme for discretionary commission arrangements (DCAs), which incentivised dealers to inflate interest rates, these are outside the judiciary remedy but under regulatory review.

Factors Regarding Secret Commission Cases that Create an Unfair Relationship

Section 140A Overview (Consumer Credit Act 1974)

Section 140A allows a court to determine that the relationship between a debtor (consumer) and creditor (finance provider) is unfair due to:

• The terms of the agreement,
• The way the lender has exercised or enforced its rights,
• Or anything done or not done by the creditor or someone connected to them (e.g. a broker).

This is commonly invoked in car finance claims involving undisclosed commissions.

Unfairness Factors in Secret Commission Car Finance Cases

Secret commission claims often arise when a car dealer or broker arranges finance and receives a commission from the lender without telling the consumer. The following are key factors that may contribute to an “unfair relationship” under Section 140A:

1. Non-Disclosure of Commission

• The consumer is not told that a commission is being paid to the broker or dealer.
• This lack of transparency undermines informed consumer decision-making.
• A “secret” commission (not mentioned at all) or “half-secret” commission (disclosed without detail) is problematic.

2. Misaligned Incentives

• Brokers or dealers may be motivated to choose finance products that provide higher commission, rather than the best deal for the consumer.
• This creates a conflict between the consumer’s interests and the broker’s financial gain, contributing to unfairness.

3. Excessive Commission Amounts

• In some cases, commissions are very high, increasing the overall cost of the finance without the consumer’s knowledge.
• The court may view a significant commission (e.g., over 50% of the interest margin) as a sign that the consumer was overcharged or misled.

4. Opaqueness in Finance Structure

• The way the finance deal is presented may be unclear or complex, making it hard for consumers to understand what they’re paying for.
• This includes vague paperwork, unclear interest breakdowns, or hidden fees and commissions.

5. Vulnerable Consumers / Power Imbalance

• Some consumers may lack experience or financial understanding and assume the broker or dealer is acting purely to help them.
• This imbalance can make the arrangement inherently unfair, especially when the broker doesn’t disclose how they’re paid.

Summary of Key Unfairness Factors

Are Lenders Off the Hook?

Not at all. Although lenders avoided a full-blown legal disaster, they are still under fire. The Financial Conduct Authority (FCA) is now running a wider investigation into historic motor finance commission practices. This review covers deals taken out between 2007 and 2021.

According to the FCA, some firms may have caused “widespread harm” to consumers. If they find that customers were treated unfairly, firms could be forced to compensate millions of drivers.

To protect those affected, the FCA announced plans to consult on a proposed redress scheme. This would cover drivers mis-sold car finance through discretionary commission arrangements (DCAs) – even if they haven’t yet made a complaint.

FCA Chief Executive Nikhil Rathi said the regulator is ready to act where firms cause harm. He promised swift enforcement against those that fail to deliver fair outcomes. If the FCA finds firms treated customers unfairly, it will require them to compensate millions of drivers.

The story is far from over. In fact, it’s just getting started.

What does this mean for Discretionary Commission Arrangement (DCA) claims

It’s important to note that the Supreme Court’s decision does not affect the Financial Conduct Authority’s (FCA) separate investigation into discretionary commission arrangements (DCAs).

The FCA extended the deadline to 4 December 2025 for motor finance firms to respond to customer complaints involving DCAs, giving the industry more time to develop a potential compensation scheme.

The FCA has confirmed it will launch a consultation on the proposed redress scheme by early October 2025. We will continue to monitor this closely and keep our news section updated as events develop.

How Much Could Affected Drivers Claim?

If your car finance deal included a hidden commission, you could be owed £1,000 to £10,000 or more.

Compensation varies depending on the loan amount, interest rate, and length of the agreement. Some claimants have received between £1,200 and £1,800. For example, one borrower with a £7,619 loan at 5.5% interest, when the lowest available rate was 2.49%, received £1,299 in compensation.

The amount depends on several factors:

• The total amount borrowed

• The interest rate charged

• The length of your agreement

• How much commission was added without your knowledge

Given that these deals ran for over a decade, the potential total for repayments is in the billions.

Who Is Eligible to Make a Car Finance Claim?

You may be eligible if:

• You bought a car using HP (Hire Purchase) or PCP (Personal Contract Purchase) between 2007 and 2021

• You got your finance through a dealer or broker

• You were not told about any commission payments

Many popular car finance companies and banks are involved, including:

• Black Horse (part of Lloyds Banking Group)

• MotoNovo

• Barclays Partner Finance

• Santander Consumer Finance

• Close Brothers Motor Finance

This is not limited to one or two lenders, it spans the entire industry.

How to Check If You Can Claim

The simplest way to find out if you can make a claim is to take our free eligibility survey. At Car Claim Specialists, we’ve made the process easy, quick and obligation-free.

You don’t need to find old paperwork. If you financed your car between 2007 and 2021, we can do the hard work for you. Many drivers don’t realise they’ve been mis-sold car finance. But with the Supreme Court car finance decision, the tide is turning in favour of consumers.

Waiting may delay your payout or mean you miss key deadlines. That’s why it’s smart to start the claims process as soon as possible.

Don’t Miss Your Chance to Claim

With billions potentially on the line, now is the time to act.

The car finance Supreme Court ruling may not have been a complete win for every consumer, but it confirmed what many already knew: hidden commissions were unfair and misled customers.

The financial industry now faces scrutiny like never before.

If you bought a car on finance and were never told about a commission, you could be entitled to thousands.

Start Your Car Finance Claim Today

Car Claim Specialists are experts in uncovering unfair car finance deals. We help drivers across the UK claim what they’re rightfully owed. There are no upfront fees, and we only charge if your claim is successful.

• No paperwork needed
• Free eligibility check
• Fast and simple process
• No win, no fee

The Supreme Court car finance ruling is only the beginning. Join thousands of customers already starting their claim today!