Car Finance Claim Rejected? What Happens Next
A rejected car finance claim does not always mean the complaint process has ended.
What happens next depends on why your lender rejected the complaint, whether your agreement falls within the FCA Motor Finance Commission Consumer Redress Scheme and what type of response you have received.
If your lender says you are not owed compensation or that your agreement falls outside the scheme, and you believe it has made a mistake. If you are still unhappy, you can refer the complaint to the Financial Ombudsman Service. You can also consider whether to pursue a claim through the courts.
Why Might a Car Finance Claim Be Rejected?
A lender can decide that compensation is not due for several reasons.
Your agreement falls outside the FCA scheme
The FCA motor finance redress scheme applies to certain motor finance agreements taken out between 6 April 2007 and 1 November 2024.
This includes Hire Purchase agreements and Personal Contract Purchase agreements. Personal Contract Hire is not covered by the scheme.
Being within the relevant dates does not automatically mean compensation is due. Other scheme requirements must also be met.
Your agreement does not meet the scheme criteria
The existence of commission does not automatically mean you are entitled to compensation.
The FCA scheme focuses on specified arrangements where consumers may have been treated unfairly. These include discretionary commission arrangements, high commission arrangements and certain contractual ties between brokers and lenders.
The FCA explains the arrangements and eligibility criteria in its consumer guidance.
A lender may reject your complaint if it decides that your agreement does not meet the relevant criteria.
An exclusion applies
Some agreements and complaints are outside the FCA scheme.
For example, the FCA confirms that exclusions can apply where a complaint has already been considered by the Financial Ombudsman Service or determined by a court, compensation has already been accepted, or certain business or high value lending is involved.
A small number of complaints may also be considered out of time.
Is a Rejected Car Finance Claim Final?
Not necessarily.
If you believe the lender has made a mistake, you can ask it to review the decision.
You should focus on the reason given in the lender’s response. For example, check whether the correct agreement was assessed and whether the information used matches your records.
A review does not guarantee a different result. The lender can reconsider the case and maintain its original decision.
What Should You Do After Your Claim Is Rejected?
Start by reading the lender’s response carefully.
Check why compensation has been refused and compare the details with any information you have about your finance agreement.
If you identify an error, explain it clearly when asking the lender to review the decision. Keep copies of any correspondence and supporting information.
You should also check whether the lender has issued a redress determination and note any deadline stated in the letter.
What Is a Redress Determination?
A redress determination is an important stage for complaints covered by the FCA motor finance scheme.
If you disagree with your lender’s response, the Financial Ombudsman Service says you should go back to the lender and ask for a redress determination.
For complaints covered by the scheme, the Financial Ombudsman generally cannot consider the case until you have received a redress determination or the deadline for the lender to provide one has passed.
How Long Do You Have to Challenge the Decision?
Under the FCA scheme, you have one month to accept or challenge the lender’s response.
This is confirmed in the FCA guidance on responding to your lender.
If you receive a redress determination and remain unhappy, check the deadline shown in the letter for contacting the Financial Ombudsman Service.
Different time limits can apply to complaints outside the motor finance redress scheme.
Can a Rejected Car Finance Claim Go to the Financial Ombudsman?
Potentially.
For a complaint covered by the FCA scheme, the Financial Ombu2dsman explains that it generally requires a redress determination, or for the deadline to provide one to have passed, before it can consider the complaint.
For scheme complaints, its role is to consider whether the lender followed the FCA motor finance redress scheme rules.
Referral does not guarantee that the lender’s decision will change.
The Financial Ombudsman Service is free for consumers and you do not need professional representation to make an eligible complaint.
What If Your Claim Has Not Been Rejected and You Are Still Waiting?
A delayed decision is not the same as a rejected claim.
As at 2 September 2026, parts of the FCA Motor Finance Commission Consumer Redress Scheme remain suspended following legal challenges.
The FCA's latest legal challenge documents confirm that the Upper Tribunal partially suspended the scheme on 1 July 2026. The FCA has also confirmed that firms must continue complying with the parts of the scheme that remain in force.
While the suspension applies, lenders do not currently need to calculate or pay compensation under the suspended parts of the scheme.
However, some consumers can still receive decisions saying that compensation is not owed.
For agreements beginning on or after 1 April 2014 where the complaint was made by 30 June 2026, the FCA says lenders should contact consumers by 18 November 2026 if compensation is not due, subject to specified exceptions.
For agreements beginning before 1 April 2014 where the complaint was made by 31 August 2026, the corresponding date is 18 January 2027.
If you complained after the relevant date and the lender decides you are not owed compensation, the FCA says it should generally tell you within five months.
Not hearing from your lender does not itself mean your complaint has been accepted or rejected.
What If Your Agreement Falls Outside the FCA Scheme?
Falling outside the motor finance commission scheme does not necessarily mean every possible complaint about your finance agreement has been rejected.
The Financial Ombudsman deals with other types of car finance complaints, including issues involving affordability, charges and how the finance was sold. These types of complaints may be considered under different rules and processes from complaints relating specifically to motor finance commission. Depending on the circumstances, a complaint that falls outside the FCA’s motor finance commission scheme may still need to be considered separately.
These complaints can follow different rules from complaints about motor finance commission.
What If You Cannot Find Your Finance Agreement?
Not having the original agreement does not necessarily prevent you from identifying your lender.
The FCA suggests checking old bank statements, contacting the dealership or checking your credit file if you are unsure which lender provided the finance.
Missing paperwork does not itself establish whether compensation is due.
Can Rejected PCP and HP Claims Be Reviewed?
Yes, where you believe the lender has made a mistake.
Hire Purchase and Personal Contract Purchase agreements can fall within the FCA scheme where the relevant requirements are met.
The type of finance alone does not determine whether compensation is due.
Does a Rejected Claim Mean You Will Never Receive Compensation?
Not necessarily.
A lender may reconsider its decision where there is evidence that the complaint was assessed incorrectly or relevant information was missed.
For complaints covered by the FCA car finance redress scheme, the Financial Ombudsman will generally consider a complaint after the lender has issued its redress determination, or after the applicable deadline for doing so has passed.
A lender review or referral to the Financial Ombudsman does not guarantee that you will receive compensation.
Do You Need a Solicitor or Claims Management Company?
No.
The FCA confirms that you can make a car finance complaint directly to your lender and do not need to use a law firm or claims management company.
You can choose professional representation if you want it, but fees may apply.
What Happens Next?
Start with the reason your lender gave for rejecting the complaint.
Check that the lender considered the correct agreement and that the details used are accurate.
If you believe there is an error, ask the lender to review its decision and explain what you believe is wrong.
Keep copies of your correspondence and pay attention to any deadline in the lender’s response or redress determination.
Where the required lender process has been completed and the complaint remains unresolved, you may be able to refer it to the Financial Ombudsman Service.
You should also distinguish a genuine rejection from a complaint that remains unresolved because of the current partial suspension of the FCA scheme.
How Mis-Sold Expert Can Help
Mis-sold Expert provides information about concerns involving car finance agreements, including PCP and HP finance.
The service explains complaint and redress processes in clear language and can manage eligible claims for consumers who choose to use a claims management company. Fees and applicable terms should be reviewed before deciding whether to use a paid representative.
Sources
- Financial Conduct Authority: Car finance claims
- Financial Conduct Authority: Motor finance scheme partially suspended
- Financial Conduct Authority: Motor finance scheme legal challenge documents
- Financial Ombudsman Service: Complaints about car finance commission
- Financial Ombudsman Service: Car finance complaints
Disclaimer: This article is for general information purposes only and does not constitute legal advice, financial advice or a recommendation to pursue a claim. Information is based on publicly available sources at the time of writing and may change as regulatory, legal or court proceedings develop. If you require advice about your individual circumstances, you should seek independent professional guidance.
