Santander Car Finance Claims: Your Guide to Success

No Win, No Fee Claims

If you bought a car on a PCP agreement using Santander Consumer Finance before 1st January 2021, then you may be eligible to make a mis-sold car finance claim and win compensation. Santander Consumer Finance’s growth within the UK leasing sector was significant during this time, so many customers may be affected. Some dealers received hidden commission payments not disclosed on a car finance agreement – which may mean you, as a Santander consumer, paid a higher interest rate and could be entitled to bring a car finance claim, leading to a substantial compensation payment.

Why Is Santander Finance Involved In Car Finance Claims?

The emerging scandal of mis-selling car finance involves motor manufacturers and various financial institutions, including Close Brothers, Black Horse Finance, part of Lloyds Banking Group, and Santander Consumer Finance.

Santander provides finance options and financial products for customers looking for car finance to purchase a new car and is just another branch of the overall Santander bank business. Many personal loans typically included a discretionary commission arrangement, and if your finance arrangement was one of them, then you may be able to make a PCP finance claim because you weren’t made aware of all the options open to you and, in fact, spent more money on your repayments as a result.

What Was The Starting Point For Santander Car Finance Claims?

The Financial Conduct Authority (FCA) started a vast investigation into hidden commission arrangements after the Financial Services Ombudsman upheld a customer complaint. The FCA banned discretionary commission arrangements (DCAs) in 2021.

Whilst the FCA investigation has been ongoing, the Court of Appeal ruled in October 2024 that it was illegal for a bank or other financial institution to pay any commission to car dealerships without first obtaining the customer’s informed consent. This ruling has increased the likelihood that the FCA will announce during 2025 the requirement for a redress scheme, similar to the PPI claims scandal a few years ago.

As a result, Santander UK has stated that it has set aside £295mn to cover the cost of potential claims. This figure was published alongside Santander’s third-quarter results, which had been delayed to calculate a possible compensation value after the court’s decision.

Industry experts predict that the motor finance industry could be hit with a total redress of as much as £30bn; Santander is not the only company involved. Lloyds Banking Group, which owns Black Horse, has set aside funds of £450m to deal with potential costs, and others will inevitably be doing the same as they try to manage the fallout.

What Happens Next With The FCA Investigation Into Santander Finance Mis-selling?

The FCA was due to announce the outcome of its investigation in September 2024. However, the scale of the investigation is vast, and the FCA also wanted to wait for the result of the appeal case in October. Consequently, it has extended the timeline for a response until May 2025.

It means that lenders and car dealerships are not obliged to review your case and issue a final response. However, they should register your car finance claim and confirm whether there was a DCA on the loan account for your car purchase.

What Type Of Agreements Are Included In The FCA Review?

Santander Consumer Finance offers car finance to individuals and businesses with a range of products including personal loans and car finance agreements.

The most popular agreement for UK motor customers is Personal Contract Purchase (PCP). This type of loan typically features a small deposit followed by a fixed sum paid monthly by direct debit from your bank account. There is usually an agreed annual mileage rate, and there may be other inducements like discounted services or a year’s free insurance.

The reason why a PCP agreement is the most popular form of vehicle finance borrowing is that it manages the problem of early rapid depreciation on a new car with something called a GMFV or Guaranteed Minimum Future Value.

At the end of the agreement, there is a large final payment called a settlement figure, often called a balloon payment. This is an optional final payment, so you can keep the car or return it and start again with a new vehicle.

The FCA investigation also includes Personal Contract Hire (PCH) schemes.

How Much Compensation Could You Receive?

The FCA will decide whether redress is necessary for the thousands of UK customers who have already complained to a lender, car dealer, or broker to date.

If the FCA supports compensation payments to consumers, it will likely devise a fair scheme to apply across the motor finance industry; the details are not yet known. It will reflect the difference between the interest rate imposed on the agreement and what would have been a fair (lower) rate prevailing at the time.

The average compensation payout is thought to be in the range of £1,000. However, the final cost could be considerably more for some customers with high-value vehicles or multiple agreements.

How Can You Make A Claim?

If your bank, lender, or car dealership has confirmed that you did pay discretionary commission on your loan agreement, then you can pursue a claim. You can do this yourself as a Santander consumer or via a claims management company. A claim can be made in writing or over the phone, and it is best to keep a record of phone conversations.

Using a claims management service to act on your behalf is free. A success fee is deducted from any compensation awarded.

Whether you claim in person or use a claims management company, your claim won’t be considered until the FCA has finished its review.

You don’t have to submit evidence of the mis-sold agreement although if you have the agreement number, then that’s helpful. However, you may need to give detail about any financial problems you’ve experienced as a result of higher monthly repayments.

Submitting a claim yourself can be complex, and it’s hard to determine what will happen next while the FCA review is ongoing. Using a claims management service for support removes all the worry and complication.

Why Use PCP Claims UK?

Fast results – We work with only the best PCP claim solicitors in the country, who all prioritise your time and compensation above all else.
No upfront risk – You don’t pay a penny for legal services unless you win, and only then will a small % of your compensation be deducted for their work.
Industry leaders – When you work with us, you work with claim experts who have connections to leading PCP claim solicitors.