Millions of drivers who purchased vehicles on finance over the last two decades are poised to receive compensation payments following a widespread car finance mis-selling scandal.
The Financial Conduct Authority (FCA) has announced that up to 14 million motorists could be eligible for payouts this year. These payments relate to nearly half of all car finance agreements made between April 2007 and November 2024, which were potentially affected by unfair commission arrangements.
This compensation covers vehicles registered from the 2007 (07) number plate through to the 2024 (74) registration, including older models bought through finance deals. The average payout is expected to be around £700 per driver.
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The FCA has indicated there will be an implementation period to allow lenders to prepare for disbursing the compensation efficiently. Automotive expert Matt Crole-Rees from Confused.com welcomed the update, stating: “Drivers who have been awaiting clarity will appreciate a smoother and faster claims process. This should ensure many receive payments within this year, reducing delays and unnecessary obstacles.”
Motorists who believe they might be eligible are advised to contact their lenders directly to file complaints. The FCA cautions against using claims management companies, as their fees could significantly reduce the amount of compensation received.
Nikhil Rathi, CEO of the FCA, emphasized the authority’s commitment to fair compensation, acknowledging the complexity of the issue and the varying opinions on the scheme’s details. “It’s time customers received fair compensation,” he said, adding, “While not everyone will get everything they desire, the FCA is focused on resolving this fairly.”