If you took out a Personal Contract Purchase (PCP) or other car finance agreement with Black Horse Finance, you may be entitled to compensation if your agreement was mis-sold. Many PCP and car finance deals were arranged through dealerships using undisclosed dealer commissions or inflated interest structures, which have since been challenged and banned by the Financial Conduct Authority (FCA).
This guide explains how Black Horse car finance agreements were structured, why so many customers may have been overcharged, how to check if you’re eligible to claim, and the steps to make a complaint or claim compensation — including links to other helpful resources on our site.
About Black Horse Finance
Black Horse Finance is a major car finance provider in the UK and a subsidiary of Lloyds Banking Group. It has long been one of the largest motor finance lenders in the UK, offering PCP, Hire Purchase (HP), and other finance products through dealerships for cars, motorcycles, and leisure vehicles. :contentReference[oaicite:0]{index=0}
Between 2007 and 2021, many UK lenders — including Black Horse — used systems where the dealership or broker could adjust the interest rate on your finance. In some cases, this meant the dealer could increase the interest rate to earn higher commission on your deal. This practice was known as a discretionary commission arrangement (DCA) and was banned by the FCA from January 2021 because it often resulted in customers paying more in interest without being informed. :contentReference[oaicite:1]{index=1}
Black Horse has been one of the main targets of regulatory and legal scrutiny over historic discretionary commission arrangements, and as a result, both the company and its parent Lloyds Banking Group have set aside substantial funds to cover potential compensation obligations. Estimates suggest Black Horse/Lloyds has earmarked **hundreds of millions of pounds** in provisions for redress related to motor finance complaints. :contentReference[oaicite:2]{index=2}
What Was Mis‑Sold in Black Horse Finance Agreements?
A car finance agreement may be considered mis‑sold — potentially giving you grounds for a claim — when key details were not properly disclosed or explained. For Black Horse finance, this can include:
- Hidden Commissions: You were not told that the dealer or broker was receiving commission based on the interest rate you paid.
- Discretionary Commission Arrangements: Dealers could raise the interest rate to increase their own earnings without your knowledge.
- Inflated Interest Rates: You paid a higher APR than necessary, which may have cost you significant extra interest over the life of the agreement.
- Misleading Information: The terms, costs, or alternatives were not clearly explained, or you were not offered all finance options available.
If any of these apply, your agreement may have been unfairly structured and subject to a compensation claim. :contentReference[oaicite:3]{index=3}
Industry and Regulatory Background
The FCA banned discretionary commission arrangements in 2021 because they were found to incentivise dealers to increase interest rates for their own financial benefit rather than serving the customer’s best interests. This ban reflects a broader clampdown on unfair sales practices in motor finance. :contentReference[oaicite:4]{index=4}
In addition, landmark decisions by the Financial Ombudsman Service (FOS) — including upheld complaints against Black Horse and other lenders — have clarified that failing to disclose commission arrangements can amount to mis‑selling. Independent commentary and industry sources suggest that a typical mis‑selling case could involve average overpayments of around £950 in interest per agreement, although actual compensation varies by case. :contentReference[oaicite:5]{index=5}
The FCA has paused responses to many motor finance commission complaints until specific complaint handling deadlines expire (currently extended to late 2025). This means some lenders, including Black Horse, are not actively responding to complaints at present, but you can still prepare and lodge your complaint now so it will be dealt with when the pause ends. :contentReference[oaicite:6]{index=6}
Signs You May Have Been Mis‑Sold by Black Horse
You might have a claim against Black Horse if:
- Your PCP or HP finance was arranged between April 2007 and January 2021 and included a discretionary commission arrangement.
- You were not told that the dealer could increase your interest rate to earn more commission.
- Your interest rate was significantly higher than the typical market rates at the time.
- You were not offered comparable options or a clear explanation of your choices.
- The dealer pressured you into taking the finance without adequate explanation.
According to industry estimates, a large proportion of car finance agreements during this period included commissions that were not clearly explained to customers, increasing the likelihood that many Black Horse customers may have valid claims. :contentReference[oaicite:7]{index=7}
Am I Eligible for a Black Horse PCP Claim?
To check eligibility, review your Black Horse finance agreement and see whether it meets the following criteria:
- The agreement was a PCP or HP contract that started before January 2021.
- You were not informed about dealer commissions or discretionary arrangements.
- You paid a higher interest rate than you would have if commission wasn’t applied.
- You were not given clear, prominent explanations of how the finance worked.
If these apply, you may have grounds to claim compensation. You can learn more about general eligibility on our eligibility page.
How Much Compensation Could You Get?
The amount you can claim depends on how much extra interest you paid and whether dealer commission was included without your informed consent. Some industry commentary suggests average compensation claims may be around £700 or more per agreement — though each case varies. :contentReference[oaicite:8]{index=8}
Since Lloyds Banking Group — the parent of Black Horse — has set aside significant funds (estimated in the hundreds of millions) to cover potential compensation, this suggests regulators and lenders anticipate that many valid claims will result in payouts, though the timing of those payments remains tied to FCA processes and potential redress schemes. :contentReference[oaicite:9]{index=9}
How to Claim Compensation from Black Horse
If you think you have a valid claim, the process generally involves:
- Gather Your Documents: Collect your original finance agreement, monthly statements, and any correspondence regarding the finance.
- Submit a Complaint to Black Horse: You can complain directly via Black Horse’s own complaints process. They even allow you to request information about whether commission was paid on your agreement. :contentReference[oaicite:10]{index=10}
- Explain Why You’re Claiming: Clearly state that you believe undisclosed commissions or mis‑selling caused you to pay more interest than necessary.
- Wait for Their Response: Under FCA guidelines, lenders are allowed a certain timeframe to respond, though many are currently paused until just before mid‑2026. :contentReference[oaicite:11]{index=11}
- Escalate to the Financial Ombudsman Service: If Black Horse rejects your complaint or you don’t get a satisfactory outcome, you can take your case to the FOS, which can award compensation independent of the lender. You can find guidance on that on our claim deadlines page.
Tips for a Successful Black Horse Claim
- Be clear and concise when explaining why your finance was unfairly priced.
- Include all supporting documents — agreements, statements, and dealer communications.
- If you don’t get a response, escalate via the Financial Ombudsman Service.
- Stay aware of deadlines: make sure you lodge complaints well before limitation periods expire.
- Consider professional advice if your case is complex or you have multiple agreements.
How Long the Process Takes
Responses from lenders can take weeks or months. If escalation to the Financial Ombudsman Service is needed, that process can take 8–12 weeks or longer depending on complexity. For general timelines, see our claims timeline page.
Frequently Asked Questions About Black Horse Claims
Can I claim if my car finance is already paid off?
Yes — even if you have finished paying the finance or sold the vehicle, you may still be entitled to compensation for mis‑selling. Eligibility depends on when the agreement was made and whether you were misled. (See our eligibility page for details.)
Do I need a solicitor to make a claim?
No — you can complain directly to Black Horse or escalate to the Financial Ombudsman Service at no cost. However, some people choose to use a claims specialist for convenience.
Is there a time limit to make a claim?
Yes — there are limitation periods and regulatory deadlines to be aware of. Visit our PCP claim deadline page for detailed guidance.
What if Black Horse rejects my complaint?
You can escalate to the Financial Ombudsman Service, which is an independent body that can award compensation even if the lender disagrees with your claim.
Conclusion
Black Horse Finance was one of the biggest motor finance providers in the UK. If your PCP or other car finance agreement was mis-sold due to undisclosed commissions, inflated interest, or misleading terms, you may be eligible to claim compensation. Start by reviewing your documents and submitting a formal complaint through Black Horse’s complaints process. If that doesn’t resolve your issue, you can escalate to the independent Financial Ombudsman Service.
Learn more about eligibility, compensation amounts, complaint templates, and deadlines throughout our site — all designed to help you recover money you may be owed.