Motorbike finance agreements between 6 April 2007 and 1 November 2024 may be affected by the Financial Conduct Authority’s (FCA) investigation into
discretionary commission arrangements. This guide aims to provide you with a full understanding of motorbike financing, the implications of DCAs, and how to proceed if you believe your finance agreement was mis-sold.
How are Motorbikes Typically Financed?
Motorbikes can be financed through various methods such as
Personal Contract Purchase (PCP),
Hire Purchase (HP), and other forms of vehicle financing. PCP is a popular choice for motorbike buyers due to its flexibility and lower monthly payments compared to outright purchase or HP. Under PCP, the borrower makes an initial deposit payment and then pays regular instalments over a fixed term. At the end of the contract, they have several options: return the bike, buy it at the agreed balloon payment, or trade it in for another model.
Hire Purchase (HP) is another common method where the customer borrows money from a lender to purchase the motorbike outright. The borrower agrees to pay back the loan plus interest over an agreed period without the option of returning the vehicle at the end of the contract.
A discretionary commission arrangement (DCA) occurs when lenders offer dealerships commissions on top of their standard fees for financing products like PCP and HP. These commissions are typically higher if the dealer negotiates a lower interest rate or sets more favourable terms for the borrower, such as reducing the amount of deposit required.
In the context of motorbike finance, DCAs can influence how lenders set interest rates and other terms offered to customers. Dealerships may offer financing at seemingly attractive rates because they receive additional compensation from the lender for doing so, which could mean that borrowers are paying higher overall costs than necessary due to these hidden commissions.
Which Motorbike Finance Lenders Are Affected?
Several motorbike finance lenders have been implicated in the FCA investigation into DCAs. Some of the most commonly affected include
Black Horse,
Close Brothers Motor Finance,
MotoNovo Finance, and
Moneybarn. These companies are known for offering financing options like PCP and HP to motorbike buyers across various dealerships.
this list is not exhaustive; other lenders may also have been involved in similar practices during the specified period. If you obtained a motorbike finance agreement through any lender operating within the UK, it might be worth investigating further whether your agreement was affected by DCAs.
How Many Motorbike Finance Agreements Are Affected?
The FCA estimates that 12.1 million eligible agreements (FCA, March 2026) across all vehicle types (FCA estimate) could have been mis-sold due to discretionary commission arrangements between April 2007 and November 2024. This includes motorbikes, cars, vans, motorcycles, and other vehicles. The total value of these agreements is estimated at £7.5 billion (FCA estimate) (FCA, March 2026).
While the majority of affected agreements are likely to be for car finance due to higher sales volumes, motorbike financing may also have been significantly impacted.
How to Check Your Agreement Agreement Type: Check if the agreement was a PCP or HP contract.
2.
Dates: Ensure that the agreement was made between 6 April 2007 and 1 November 2024.
3.
Lender Name: Identify which finance provider you used to obtain your motorbike.
If all of these criteria match, it is advisable to explore further whether your finance deal might have been mis-sold due to DCAs.
Complaining directly to your lender about a potential DCA-related issue is straightforward and can be done without incurring any fees. Here’s how you can proceed:
1.
Gather Documentation: Collect all relevant documents related to your motorbike finance agreement, including loan agreements, terms and conditions, and correspondence with the lender.
2.
Contact Lender: Reach out to your lender via phone or email to explain that you believe your financing arrangement may have been mis-sold due to a DCA scheme. Request confirmation of whether DCAs were used in setting up your agreement.
3.
Provide Details: Include all necessary details about your finance contract, such as dates, amounts paid, and any other relevant information.
Remember: "You can complain directly to your lender for free - you do not need a
claims management company."
What Compensation Could You Receive?
Based on FCA estimates, motorbike finance agreements affected by DCAs could be covered by the FCA redress scheme. of around £829 (FCA estimate) per agreement. This figure reflects the average amount that lenders have agreed to pay out as part of the redress scheme.
The exact compensation you might receive will depend on various factors such as the terms and conditions of your finance contract, any additional costs incurred due to the mis-selling, and how these align with FCA guidelines.
If your lender rejects your complaint or fails to respond within eight weeks, you have the option to escalate the matter to the Financial Ombudsman Service (
FOS). The FOS is an independent body that can review and adjudicate on disputes between financial services providers and their customers.
To escalate a case to the FOS:
1.
Submit Your Case: Fill out the necessary forms provided by the FOS website.
2.
Provide Supporting Evidence: Include all relevant documents, correspondence with your lender, and any other pertinent information that supports your claim.
3.
Follow Up: Keep track of deadlines and follow up if there are delays in receiving a response from the Ombudsman.
Sources and References
- Financial Conduct Authority (FCA), 2024
- Office for National Statistics (ONS) Census, 2021
Key FCA Figures
The FCA confirmed on 30 March 2026: 12.1 million eligible agreements, £829 average compensation per agreement, £7.5 billion total redress at 75% consumer uptake, and £9.1 billion total cost to firms. The scheme covers agreements from 6 April 2007 to 1 November 2024. Two deadlines apply: 30 June 2026 for post-2014 agreements and 31 August 2026 for pre-2014. Final complaint deadline: 31 August 2027.
You can complain to your lender directly for free. You do not need a claims management company.
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MLJ.org.uk (mlj.org.uk) is a free, independent information service. We are not a claims management company, solicitor, law firm, or financial adviser. We do not handle complaints, process claims, charge fees, or accept any percentage of compensation. This information does not constitute legal or financial advice. You can complain to your lender directly for free. You do not need a claims management company. If your lender rejects your complaint, you can escalate to the Financial Ombudsman Service at no cost. For personalised legal or financial advice, consult a qualified professional.