US EditionVictims of mis-sold car finance set to get less than £950 per deal
UNITED KINGDOM, AUG 4 – The Financial Conduct Authority plans a compensation scheme for up to 14 million motorists mis-sold car finance deals, with payouts capped at £950 per agreement, starting in 2026.
- The UK Supreme Court ruled on August 1, 2025, in three linked cases regarding car finance commission disclosure and mis-selling practices.
- This ruling overturned a prior Court of Appeal decision that required car dealers to gain customers' fully informed consent before receiving commissions.
- The ruling found lenders not liable for undisclosed high commissions paid to dealers, which were common in discretionary commission agreements banned since January 2021.
- Financial expert Martin Lewis said up to 14 million UK motorists could share a compensation pot estimated between £9 billion and £18 billion, with payouts rarely exceeding £950 per deal.
- The FCA plans a six-week consultation launching in October 2025 to establish a simple redress scheme, and affected consumers should contact lenders directly rather than use claims firms.
28 Articles
28 Articles
UK car finance compensation slashed
Millions of UK drivers could receive car finance compensation from 2026 – but the payout is now much smaller than expected following a major Supreme Court ruling on Friday, August 1. The ruling, which overturned a previous Court of Appeal decision, found that while lenders often failed to disclose commission payments to car dealers, this didn’t automatically mean customers suffered harm. Source
Motor finance: Concerns raised that some firms’ records may be ‘patchy at best’
The Finance and Leasing Association said it will be ‘interesting to see’ how dated information will be addressed in the FCA’s consultation. Concerns have been raised over whether consumers or firms will still have the paperwork that may be needed for a motor finance redress scheme. Stephen Haddrill, director general of the Finance and Leasing Association (FLA) said: “We have concerns about whether it is possible to have a fair redress scheme tha…
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