Does a Car Finance Complaint Affect a New Application?

If you've made a car finance complaint about a previous agreement, you might be wondering whether it could affect your chances of getting finance for another car.

With many UK drivers waiting for updates on mis-sold car finance complaints and the FCA's car finance compensation scheme, it's understandable to have questions about how an ongoing claim could affect a new car finance application.

The good news is that making a car finance compensation claim doesn't automatically stop you from getting finance again. A complaint isn't normally recorded as a negative entry on your credit file, and lenders will still consider factors such as your credit history and affordability.

So, can you apply for new car finance while waiting for compensation, and will an ongoing complaint affect your credit score? Here's what you need to know

What's Happening With the Car Finance Compensation Scheme?

The Financial Conduct Authority (FCA) introduced a motor finance compensation scheme covering certain agreements taken out between 6 April 2007 and 1 November 2024.

The scheme is intended to compensate eligible customers who were treated unfairly because certain commission arrangements between lenders and brokers weren't properly disclosed.

However, the scheme is currently facing legal challenges.

On 2 July 2026, the Upper Tribunal suspended parts of the scheme while challenges brought by three lenders and a consumer representative are considered.

The FCA has since confirmed that the legal challenges will be heard between 16 and 26 February 2027.

While parts of the scheme are suspended, lenders are still expected to follow the rules that remain in force and progress complaints where possible.

If you've already complained and are waiting for a response, this may help explain why your case hasn't been resolved yet.

You can find the latest information in the FCA's official update on the motor finance legal challenges.

Importantly, having an unresolved complaint doesn't mean you have to wait before considering another car.

Does a Car Finance Complaint Show on Your Credit File?

Making a complaint about a previous car finance agreement doesn't normally appear as a separate negative entry on your credit report.

Your credit file typically contains information such as:

• Your current and previous credit agreements
• Outstanding balances and repayment history
• Missed payments or defaults
• Credit searches made by lenders
• Financial associations with other people

Simply raising a complaint about how an agreement was sold isn't the same as missing a payment or defaulting on a loan.

However, a complaint doesn't remove your responsibility to keep up with your existing car finance payments.

If your agreement is still active and you stop paying while waiting for compensation, those missed payments could be recorded on your credit file and affect future applications.

In some circumstances, an account may also be marked as disputed, depending on the nature of the issue. If you're concerned about how your lender is reporting the agreement, you can check your credit report and ask for clarification.

For more information about managing your credit history, read our guide on improving your credit score while on car finance.

Can Other Car Finance Lenders See That You've Made a Complaint?

A car finance complaint isn't normally listed on your credit report for other lenders to see.

This means that a new finance provider generally won't find a record of your complaint simply by carrying out a standard credit check.

However, there are a couple of things worth understanding.

If you apply for finance through the same lender you've complained to, they may already have information about your previous agreement and complaint.

Financial organisations within the same group may also share certain customer information where permitted under their privacy policies and applicable data protection rules.

That doesn't mean your application will automatically be refused.

Lenders still need to assess your eligibility and affordability, and a previous complaint shouldn't be treated as evidence that you can't manage credit.

If you're considering a different lender, a car finance broker could help you explore alternative options.

At Carloans365, we work with a panel of lenders, giving customers access to different finance options through one application.

What Do Lenders Check When You Apply for Car Finance?

When assessing a new application, lenders consider several factors to decide whether the agreement is suitable and affordable.

These commonly include:

• Affordability: Your income, regular spending and existing financial commitments. Lenders need to be satisfied that you can comfortably manage the proposed repayments.
• Credit history: How you've managed previous borrowing, including missed payments, defaults and outstanding debts.
• Employment and income: Your employment circumstances and whether you have a reliable source of income to support the agreement.
• Personal information: Your address history, identity and other details used to verify your application.
• The finance agreement: The amount you want to borrow, any deposit, repayment term and the vehicle you're financing.

A previous car finance complaint isn't normally one of the standard factors recorded on your credit report.

However, if you still have an active finance agreement, the outstanding balance and monthly repayments may affect what you can afford to borrow.

If you'd like to understand what lenders consider before applying, take a look at our guide on why car finance applications get declined.

Can You Change Your Car While a Finance Complaint Is Ongoing?

Yes, in most cases, you can change your car while a complaint about a previous finance agreement is being investigated.

A complaint about undisclosed commission relates to the circumstances in which the finance agreement was arranged.

It doesn't necessarily depend on whether you still own the vehicle or have an active agreement.

This means settling your finance early or part-exchanging your car doesn't automatically withdraw an existing commission complaint.

However, you should check the terms of your agreement and any settlement arrangements before making changes.

There are also two practical things worth considering.

Keep Your Original Finance Documents

Even if you settle your agreement or sell the car, it's worth keeping copies of your finance paperwork.

This could include:

• Your original finance agreement
• Details of the lender and dealership
• Any correspondence about your complaint
• Settlement statements or confirmation that the agreement has ended
• Any documents relating to commission arrangements

These records may be useful if your lender requests further information while reviewing your complaint.

Check Your Settlement Figure Before Changing Cars

If your current vehicle is still on finance, you'll need to understand how much is outstanding before selling or part-exchanging it.

Contact your lender and request an early settlement figure.

You can then compare this amount with the current value of your car.

If your car is worth more than the settlement figure, you may have positive equity that could go towards your next vehicle.

If your car is worth less than you owe, you'll be in negative equity. You'll need to consider how to cover that shortfall, as it may affect your next finance agreement.

For a full explanation, read our guide on how to part-exchange a car on finance.

You can also explore how to upgrade your car while still on finance if you're looking to change vehicles before your agreement ends.

What Should You Do If You Need a New Car While Waiting for Compensation?

If you've already made a car finance complaint but need to replace your vehicle, there are a few steps worth taking before applying for another agreement.

1. Keep Up With Your Existing Finance Payments

If your current agreement is still active, continue making repayments as agreed.

Stopping payments because you have an outstanding complaint could lead to arrears, additional charges or negative information being recorded on your credit file.

If you're struggling to afford your current repayments, contact your lender to discuss the support available.

2. Check Your Existing Finance Agreement

Before changing cars, review your agreement to understand your options.

Depending on whether you have Personal Contract Purchase (PCP) or Hire Purchase (HP), you may be able to settle the finance early, part-exchange the vehicle or explore other ways of ending the agreement.

Your agreement will explain the relevant terms and conditions.

3. Start With a Soft Credit Search

Before submitting a full application, consider checking your eligibility with a provider that uses a soft credit search.

Soft searches don't affect your credit score and aren't visible to other lenders. This can help you explore potential finance options without immediately submitting another formal credit application.

At Carloans365, our initial eligibility check uses a soft credit search. If you decide to proceed, a lender may carry out a hard search as part of the full application process.

4. Make Sure Your Next Car Is Affordable

Your financial circumstances may have changed since you took out your previous agreement. Before applying, consider how much you can realistically afford to spend each month.

Remember to account for insurance, fuel, maintenance and other running costs alongside the monthly finance repayments.

Choosing a car within your budget can help you avoid taking on repayments that become difficult to manage.

Can Carloans365 Help You Get Finance While a Complaint Is Ongoing?

Yes. If you've made a complaint about a previous car finance agreement, you can still explore your options for financing another vehicle.

At Carloans365, we help customers find car finance through our panel of lenders, including drivers who may have experienced credit difficulties. We're a credit broker, not a lender, and we don't handle car finance compensation complaints or claims.

If you believe you were mis-sold car finance, you can complain directly to your lender without using a claims management company. The Financial Ombudsman Service can also help with eligible disputes.

Our role is to help you explore finance options for your next car.

You can check your initial eligibility without affecting your credit score, and any finance offer will be subject to lender criteria and affordability checks.

Check your car finance eligibility