The Financial Ombudsman Expects 60,000 Car Finance Complaints This Year

• Hire purchase motor deals were the single most complained-about financial product in Britain last year, with 37,700 grievances landing at the Financial Ombudsman Service.
• The watchdog expects almost a quarter of every complaint it resolves in the year ahead to be about car finance commission, roughly 60,000 cases out of 245,000.
• Total complaints to the Ombudsman fell by nearly 30 percent over the same period, meaning car finance rows now stand out even more sharply against everything else it handles.

Car Finance Is Now the Single Biggest Source of Complaints to Britain’s Financial Watchdog

The Financial Ombudsman Service has published its annual complaints data for 2025/26, and the numbers point to one product line dominating its inbox: hire purchase agreements used to buy cars.

Across the financial year, the Ombudsman received 214,600 new complaints in total, a drop of almost 30 percent on the 305,700 it received the year before. Yet within that smaller pile, hire purchase (motor) complaints held the top spot as the single most complained-about product, with 37,700 cases. That is down from 76,200 the previous year, but the fall in every other category was steeper still, which is how a shrinking number of car finance complaints still ended up as the biggest single category in the entire report.

On average the Ombudsman upheld 30 percent of the complaints it resolved across all financial products in 2025/26. That means roughly three in ten drivers who took a dispute about their car finance deal all the way to the free adjudication service came away with a ruling in their favour.

Who This Hits

This affects anyone who has bought a car on hire purchase or a personal contract purchase (PCP) deal, which covers a substantial share of new and used car sales in the UK. Most complaints in this category relate to discretionary commission arrangements, where a dealer or broker was paid a hidden commission that could be increased by pushing up the interest rate a customer was charged, without the customer being told.

The Financial Conduct Authority has already set up an industry-wide redress scheme covering deals arranged under these hidden commission structures before they were banned in January 2021, and lenders have been working through a deadline to respond to customers this year. But the Ombudsman’s own data makes clear that plenty of drivers are not waiting for that scheme to run its course. They are complaining directly, first to their lender and then, if unsatisfied, to the Ombudsman itself.

It also affects anyone with a live complaint currently working its way through the system. The Ombudsman’s forecast for 2026/27 is stark: of the 245,000 cases it expects to resolve in the year ahead, close to 60,000, near enough a quarter, are expected to relate specifically to motor finance commission. That is a scale of caseload the service has rarely handled for a single financial product.

It is worth being precise about what a discretionary commission arrangement actually was; plenty of drivers who had one still do not realise it. Under these deals, a car dealer or credit broker arranging finance was free to set the interest rate a customer paid within a range set by the lender, and the broker’s own commission increased the higher that rate was pushed. A customer with a strong credit history and a low agreed rate could still have paid more interest than they needed to, purely down to the financial incentive the person selling them the car had to charge more. The practice was banned by the Financial Conduct Authority from January 2021, which is why that cut-off date is so significant for anyone checking whether they might be affected.

The redress scheme the FCA has now put in place runs alongside, rather than instead of, a driver’s right to complain directly. Lenders have been working through their own responses to customers under that scheme this year, but the Ombudsman’s figures show a large and growing number of drivers are not content to wait for a letter from their lender and are complaining in parallel.

The Data Behind the Story

Three figures from the Ombudsman’s own report tell the story clearly. First, 37,700 hire purchase (motor) complaints in 2025/26 made it the most complained-about product of any kind, ahead of every other banking, insurance, investment and credit product the Ombudsman covers. Second, that total fell from 76,200 the year before, roughly halving, yet the category still finished on top, with complaint volumes elsewhere falling even faster. Third, close to 60,000 of the 245,000 cases the Ombudsman expects to resolve in 2026/27, just under a quarter, are forecast to be motor finance commission complaints.

Put together, those numbers describe a backlog that is easing in absolute terms but becoming more concentrated. Car finance complaints are shrinking slower than the rest of the Ombudsman’s caseload, which is why they now dominate its statistics more than they did when volumes were higher across the board.

The 30 percent average uphold rate is also worth sitting with. It is not a guarantee, and plenty of complaints are rejected, but it means a meaningful share of drivers who push their case to the end of the process are being told they were right to complain. That figure covers every product the Ombudsman handles rather than motor finance alone, so it should be read as a general guide to how often a complaint succeeds rather than a precise prediction for any one driver’s case.

What It Costs and What It Means

If you bought a car on finance before commission rules changed in January 2021, and especially if you never had the commission arrangement or its structure explained to you at the time, you could have grounds for a complaint regardless of whether your lender has already contacted you about the industry redress scheme. The two routes, the FCA-run redress scheme and a complaint directly to the Ombudsman, are not identical, and pursuing one does not automatically mean the other is closed off.

There is no cost to using the Ombudsman. It is a free service, and using it does not require a solicitor or a claims management company, both of which typically take a cut of any compensation for doing very little that a driver cannot do for free. Lenders have separately been working through the industry-wide car finance redress scheme the FCA set a deadline for this year, though that process runs alongside a driver’s right to complain directly rather than replacing it. The process starts with a complaint to the lender, which then has up to eight weeks to respond before the case can be escalated to the Ombudsman.

Drivers who are unsure whether they had a commission arrangement attached to their finance agreement can ask their lender directly for details of how the deal was structured and what commission, if any, was paid to the dealer or broker who arranged it. Anyone buying a used car on finance for the first time can also check it for outstanding finance before handing over any money, a separate but related way drivers lose out on car finance deals.

Timing is important too. A complaint to the lender typically gets an eight week window for a response before it can be escalated, and there are separate time limits on how long after taking out a finance agreement a complaint can still be brought, so drivers who think they could have a case are better off checking sooner rather than assuming there is no rush. The Ombudsman’s own guidance sets out these limits in detail, and case handlers there can confirm whether a particular agreement still falls within them before a driver commits any time to pursuing it.

It is also worth remembering that the Ombudsman covers far more than car finance commission. Complaints about the sale of the finance itself, about affordability checks at the point of sale, and about how a lender behaved when a customer hit repayment difficulties all sit alongside commission complaints in the same annual data, and a driver unhappy with more than one part of how their deal was handled does not need to raise each issue as a separate case.

What to Do Next

Anyone with a hire purchase or PCP agreement taken out before January 2021 should check their paperwork or contact their lender to ask whether a discretionary commission arrangement applied. If the answer is unclear, or if a complaint has already been rejected once, the Ombudsman remains available as a free second opinion, and its own data shows almost a third of complaints it rules on are upheld.

With the Ombudsman itself bracing for a near-quarter of its total 2026/27 caseload to be about car finance commission, drivers who think they were mis-sold a deal are far from alone, and the service is already resourced for exactly this scale of complaint.

For anyone still repaying a car finance agreement, it is also worth keeping records of correspondence with the lender and any commission-related information they provide, as that paperwork is often what determines how a complaint is eventually decided. Drivers who have sold the car the finance agreement covered are still entitled to complain about how that agreement was arranged, so having settled or transferred the finance is not a reason to assume a complaint is no longer possible.

Sources:
Financial Ombudsman Service, Annual complaints data and insight 2025/26: financial-ombudsman.org.uk
Financial Ombudsman Service, Complaints about motor finance commission: financial-ombudsman.org.uk