Supreme Court ruling on car finance Drivers Are Blocked

A recent Supreme Court ruling has closed the door for millions of UK motorists who had hoped to claim compensation for hidden car finance commissions. The decision, handed down in 2025, has limited the scope of claims that drivers can pursue. However, some customers may still be entitled to payouts depending on the details of their agreements.

What Was the Dispute About?

Over the last two decades, many drivers financed cars through personal contract purchase (PCP) or hire purchase (HP) agreements. In a large number of cases, brokers or dealerships received commissions from lenders that were not clearly disclosed to customers.

Campaigners argued that this practice was unfair. In some cases, drivers ended up paying higher interest rates without knowing that part of their payment was going directly to the broker as commission. This led to a surge in legal claims, with some motorists expecting thousands of pounds in refunds.

The Supreme Court’s Decision

The Court ruled that not all hidden commission arrangements were unlawful. The main points included:

• If the finance paperwork stated that a commission might be paid, even in general terms, this could count as disclosure.
• Only agreements with no disclosure at all, or where customers were actively misled, may still result in successful claims.
• What was considered normal practice in the industry at the time will also be taken into account.

This means that the majority of motorists will no longer qualify for automatic refunds.

Who May Still Be Eligible for Compensation?

Although most claims are now blocked, there are still some situations where drivers may have a case:

• If you were never told about commissions in any form.
• If you were told there were no commissions but this was untrue.
• If the interest rate you paid was increased directly to boost commission.
• If you were a vulnerable customer who was not given a fair explanation of costs.

These circumstances may still allow a claim, but each case will need to be assessed individually.

What This Means for Drivers

Anyone who financed a car between the early 2000s and 2021 may have seen adverts about claiming hidden commission refunds. Following the ruling, most of those drivers will not be able to move forward with claims.

That said, it is important not to assume you have no chance if you were never told about commissions. Reviewing your documents and getting legal advice remains the best approach.

Practical Advice

• Review your finance agreement to see if commission is mentioned.
• Ask your lender for a full breakdown of your deal.
• Seek independent legal advice to check if your case qualifies.

Conclusion

The Supreme Court ruling has narrowed the scope for hidden commission claims, but it has not shut the door completely. While millions of drivers will now miss out on payouts, some customers may still receive compensation where disclosure was missing or misleading. Checking your paperwork and getting expert advice is the key to understanding whether you are still eligible.

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