What happens to the GAP insurance part of your motor finance complaint?

The partial suspension of the Financial Conduct Authority’s (FCA) motor finance consumer redress scheme means that compensation payments are not expected to begin until 2027 at the earliest. The Upper Tribunal will hear the legal challenges to the scheme on 14–18 December 2026 or 16–26 February 2027, with the dates to be confirmed depending on whether any of the challengers (Mercedes-Benz Financial Services, Volkswagen Financial Services, Crédit Agricole Auto Finance and Consumer Voice) apply for further expert opinion or disclosure of information, and on whether these applications succeed.

While the partial suspension relates to elements covered by the scheme, it does not mean that every part of your complaint is on hold.

If you complained about Guaranteed Asset Protection (GAP) insurance or another add-on product alongside your motor finance commission complaint, or you complained about one of these products separately, a different set of rules applies.

Add-on complaints were never inside the scheme

The FCA scheme deals exclusively with commission arrangements in relation to motor finance agreements and does not address similar arrangements on common add-ons like GAP insurance, alloy wheel cover, tyre insurance and cosmetic cover.

If you raised a complaint about GAP insurance or another add-on product either directly with your lender or through a representative, your lender should be dealing with it. The regulator has confirmed that ‘complaints that are entirely outside the scope of the scheme rules should be progressed in the usual way’.

About mixed complaints and what your lender must tell you

It is likely, where representatives have identified issues with add-ons across the broader motor finance transaction, that many complaints will jointly cover the motor finance agreement itself and add-ons. While it does not explicitly name add-on products, the regulator does mention that lenders should ‘tell complainants the outcome of any non-scheme aspects of a mixed complaint, where the complaint covers matters both within and outside the scheme and the firm says they are not owed compensation for the scheme aspects’.

That means that if you are not owed compensation under the redress scheme, your lender should inform you of this within the FCA’s published timeline but also respond to any non-scheme element of your complaint.

What is the timeline for lenders to provide these responses?

If you have complained and are not owed compensation under the redress scheme, lenders must tell you by:

• 18 November 2026, if your agreement began on or after 1 April 2014 and you had complained by 30 June 2026; or
• 18 January 2027, if your agreement began before 1 April 2014 and you complained by 31 August 2026.

If you complain after these dates and you are not owed compensation, you should receive a response within five months. The FCA has stated that it will not treat a lender as non-compliant or take enforcement action against them so long as they provide you with a response within seven weeks of the relevant deadline. In practical terms, that means you can add nearly two months onto the above timescales.

Exceptions apply to these deadlines where your lender:

• considers your complaint to be out of time; or
• relies on the exception for contractual ties that involve visible links between the lender, manufacturer and franchised dealer.

Both exceptions apply as these elements are being challenged at the Upper Tribunal, but neither concerns add-on products.

What to do if your lender has not addressed a complaint about an add-on

Check what you actually complained about, or ask the firm representing you if you have instructed one. If your motor finance commission complaint mentioned GAP insurance or another add-on, and your lender only acknowledged or responded in relation to your motor finance agreement, write back and ask for a decision on the non-scheme element. Reference the date of your original complaint.

If you never complained about add-ons or have yet to receive a response from your lender, you can complain about it now. It is a separate complaint, and any material changes made to the redress scheme should not affect it.

If your lender did not respond or you are dissatisfied with the response, you can also complain to the Financial Ombudsman Service or consider pursuing a claim through the courts. If you have instructed a professional representative in relation to your claim, they will be able to advise you on the most appropriate path.

It is worth understanding that these complaints are different

A complaint about your motor finance add-ons is not a smaller version of your motor finance complaint. It relies on different facts, including:

• what the product or policy cost;
• how much of that was commission;
• what was disclosed;
• whether the product suited you; and
• whether the sale followed the rules that applied to it.

We explored these in more detail in our analysis of GAP insurance and add-on mis-selling.

While the complaints themselves are separate from each other, there may be a financial link if your premium on any add-ons was rolled into the finance agreement. In this scenario, you will have paid the inflated price and paid interest on it for the life of the loan.

Register your motor finance claim with Harcus Parker

You do not need professional representation to complain to your lender about motor finance commission or add-on products. You can do so and receive any compensation you are due at no cost.

If you choose to instruct us to manage your motor finance claim, we can help you:

• establish what add-on products you purchased alongside your motor finance agreement;
• request disclosure of the commission paid on each product;
• review a response that deals with only part of your complaint; and
• raise and pursue claims in respect of those products, if applicable, on your behalf.

We should caution that instructing a solicitor does not guarantee that you will receive additional compensation or even have a valid claim in respect of your motor finance agreement or add-on products. However, choosing professional representation means that the whole of your transaction can be examined and verified, rather than lenders assessing your motor finance agreement in isolation. 

You can learn more about the benefits of legal representation here, or check your eligibility and register your claim with Harcus Parker here.