Why use a solicitor for your car finance claim?

You do not need to instruct a solicitor to bring a car finance mis-selling claim and to receive any compensation that is due without charge; however, there are many reasons why you may wish to do so.

By instructing Harcus Parker to manage your car finance claim, you will enjoy numerous benefits that would otherwise remain untapped were you to take a complaint to a lender yourself.

1. The current regulatory proposals are for a redress scheme to be lender-led

Although we applaud the regulator for its work on motor finance, it is of significant concern to us that under the Financial Conduct Authority’s (FCA) current proposals, its car finance redress scheme would be lender-led, giving the very companies that mis-sold millions of motor finance agreements in the first place the authority to calculate what they owe you.

Given that lenders' actions are what caused mis-selling on such a scale over more than 17 years, it is entirely understandable that you may not trust the lenders who did not act in your best interests when you took out your motor finance agreement to do the right thing now.

In a report published on 3 November 2025, titled Car Finance Scandal: Addressing Redress, the All-Party Parliamentary Group (APPG) on Fair Banking cited the complexity of the regulator’s proposed redress calculations as an aspect of the scheme that lenders could exploit to avoid paying consumers what they owe, along with various further observations as to why and how it felt the FCA had sided with lenders in its broader proposals.

Although the regulator would argue that it has designed its redress scheme to ensure that as many eligible consumers as possible receive compensation, it does not guarantee that each individual will receive the full amount they are owed based on their specific circumstances.

2.Certainty and verification of your claim

The regulator’s current proposals are that your current and previous car finance lenders should attempt to contact you and try to trace their customers. However, there is no certainty that your lender will be able to contact you, particularly if you have changed address, changed your name, or your agreement concluded six years ago, and your previous lender(s) no longer hold your records.

It is also unclear to what extent lenders will be responsible for attempting to locate you if they are unable to contact you at the last known address they hold for you. This presents a risk for you as a claimant, as the FCA's proposed redress scheme rules require you to respond to the lender. However, if your lender does not contact you, the onus is on you to contact your lender with your relevant details, either directly or via a professional representative. The regulator acknowledges that not everyone will receive contact from their lender and has encouraged consumers to submit complaints before the redress scheme commences.

Another risk arises from the regulator's proposed timeline, which states that you will lose your opportunity to claim redress if you do not contact your lender within 12 months of the formal start of the scheme.

In addition to these concerns, we also note that the currently proposed compensation calculation methodology is complex and could result in you receiving a significantly lower redress payment than the actual amount you overpaid on your car finance agreement as a consequence of your lender’s actions. When you instruct a solicitor to pursue your claim, they can check your lenders’ calculations and require them to disclose the relevant information on which they are based, increasing the chances of you getting a redress award representative of your loss (albeit that if we claim through the redress scheme on your behalf, we will be constrained by the rules of the scheme and would be unable to secure an award greater than they allow.

3.Investigate claims beyond the redress scheme

The primary purpose of instructing a solicitor is to receive the car finance mis-selling compensation you deserve from your lender. If a lender denies wrongdoing and disputes that mis-selling occurred, claims not to have any information about your historical agreement(s), or does not offer what we estimate and believe to be the correct amount of redress, a solicitor can challenge those decisions and directions on your behalf.

That does not mean that a solicitor will be able to achieve a better outcome through the redress scheme than what the regulator's rules dictate; however, they can hold your lender(s) to their terms and ensure they correctly follow the rules.
Instructing a solicitor to investigate your car finance claim may also enable you to bring a more substantial claim or open up avenues for alternative claims. Issues your solicitor may be able to investigate and assist you with include:

• Receiving a higher compensatory interest rate. The FCA’s proposed redress scheme rules suggest that some consumers may be eligible to object to the proposed rate of compensatory interest, which the regulator has set at a rate which is likely to average out at 2.09%, to be calculated on a simple rather than compound basis, saving lenders billions. Consumers eligible for an enhanced rate are those who can demonstrate that they had to borrow money at a higher rate due to the unavailability of funds they should have had, given their inflated car finance payment. A solicitor will be able to help gather and present the relevant evidence to help you achieve this higher rate.
• Irresponsible lending claims. If it appears that, because of your personal circumstances, lenders should never have offered you car finance in the first place, then, outside of the motor finance redress scheme, we may be able to bring an irresponsible lending claim on your behalf.
• Interest calculations. A solicitor can check if the interest on your car finance agreement was calculated correctly and in accordance with your contract. If it were not, this may also give rise to an additional claim outside of the FCA’s redress scheme.
• Commissions on related products. When requesting disclosure from your lender(s), a solicitor can also request disclosure of commissions paid on insurance or products you financed in relation to your motor vehicle purchase, including GAP insurance, paint insurance and alloy wheel insurance.

4.You could secure a higher than average compensation payout

The APPG’s report on the car finance redress scheme noted that, in contrast to the FCA's average compensation estimate of £700 per mis-sold agreement, taking a case to court could achieve an average compensation award of £1,500. Note that this does not necessarily mean that a solicitor would advise or suggest that you should in fact take your claim(s) to court by default, as any such decision will depend on the specific circumstances of your claim(s) and your own feelings about risk and delay.

At the same time, you may have paid commissions at such a level that it is worth your while seeking compensation through the courts instead of accepting what your lender or lenders offer you via the redress scheme, if that figure is lower than what a court would award.
In such circumstances, a solicitor will be able to analyse the evidence and act on your behalf in cases where it is deemed appropriate and in your best interests to opt out of the redress scheme and accept the inevitably longer and potentially riskier process of litigation.

5.You could receive your compensation more quickly

Under the FCA’s redress scheme proposals, consumers who have already lodged their claim with their lender are likely to receive their compensation sooner, as lenders will be required to address existing complaints within three months and to contact all affected customers within six months.

6.You avoid the hassle and stress of a complex process

Although you can bring your car finance claim yourself at no cost, doing so could create a significant administrative burden and hassle.

For example, if your lender fails to contact you during the redress scheme, or you decide to start a complaint before the redress scheme formally commences, you will need to:

• Check that you are eligible to bring a claim.
• Identify your lender(s).
• Gather information about your agreements.
• Request your data from the lender and your car dealer/broker.
• Draft and submit your complaint.
• 'Start the clock,' counting down to when you should receive a response from your lender*.
• Keep your paperwork – your 'claim file' – organised.
• Review the outcome.
• Escalate your complaint to the Financial Ombudsman Service if you are not satisfied with the outcome.
• Stay abreast of further developments in the FCA's redress scheme rules. However, as of 10 November 2025, we do not anticipate any significant changes between the end of the consultation period and the commencement of the scheme. Lenders may, however, choose to seek a Judicial Review of the scheme and the regulator's rules, which could further delay redress payments.

*On 5 November 2025, in an update on its motor finance redress scheme consultation, the FCA confirmed that its consultation concerning the pause on car finance complaint handling, which at the time of writing remained in effect until 4 December 2025, is now closed and that it is considering responses and its next steps.

In contrast, should you instruct a solicitor to bring your claim, you do not need to do so much as even to find your paperwork. They can manage the entire process on your behalf, from identifying your previous car finance agreements and submitting your claim(s) to your lender(s) to making all necessary representations and distributing your redress.

In addition to managing your actual claim, dealing with bank correspondence and legalese can be daunting, especially if your lender proves uncooperative and challenging to work with.

Even if you choose not to complain directly and wait for the redress scheme to begin, you will still have to engage with the scheme itself and communicate with your lender(s) about issues such as whether you wish to ‘opt-in’ to the scheme and make a complaint or whether you wish to ‘opt-out’ if you have already made a complaint.

Instructing a solicitor to bring your claim removes all of this stress from you and allows a team of experts to do the work and get your redress for you.

7.There is no risk for you

If you choose to instruct a solicitor on a no-win, no-fee basis, you will pay no upfront costs and only pay a fee if you are awarded compensation.

When will I receive my car finance mis-selling compensation?

Based on the FCA’s current guidance, we anticipate that car finance mis-selling compensation payments will commence in mid-2026.

How can I register my claim with Harcus Parker?

You can check your eligibility and register your claim here.