Millions of UK drivers are set to get compensation after being mis-sold car finance deals – with average payouts of around £700 per agreement. The Financial Conduct Authority (FCA) has announced a major redress scheme to make things right for people who were unfairly charged more for their car loans.
This could affect around 14 million finance deals made between 2007 and 2024, with total payouts reaching an estimated £8.2 billion. Here’s everything you need to know — and what to do if you think you’re affected.
What’s the Car Finance Scandal All About?
The scandal centres on hidden commissions between car dealers and lenders.
Before 2021, many car finance agreements included something called “discretionary commission arrangements” (DCAs). These allowed dealers to earn more money if they convinced customers to accept a higher interest rate.
In other words, the more you paid, the more commission the dealer got — and that wasn’t always made clear to buyers.
The FCA banned these arrangements in 2021, saying they were unfair and misleading.
How Much Will Drivers Get Back?
The FCA says the average payout will be around £700 per deal, though it could be more or less depending on your situation.
- Around 44% of all car finance deals since 2007 could be eligible.
- Total payouts are expected to cost lenders about £8.2 billion.
- The scheme will be free to use, and people won’t need a claims management company or solicitor.
The FCA also warns people not to pay anyone to make a claim for them — the process will be straightforward and direct through your lender.
When Will Compensation Be Paid?
The FCA plans to launch the compensation scheme in early 2026.
Here’s how it’ll work:
- If you’ve already complained, your case should be reviewed first.
- If you haven’t complained yet, your lender will contact you within six months of the scheme starting.
- You’ll have six months to opt in once you’re contacted.
- If your lender no longer has your details, you’ll still have a year to make a claim once the scheme opens.
So, if you think you might be owed money, make sure your lender has your current contact information.
Why the Payouts Matter
The FCA’s goal is to rebuild trust in the car finance market. For years, many customers were unknowingly charged higher rates just to boost dealer commissions.
By compensating those affected, the FCA hopes to make things fairer and simpler going forward.
How Fleet Service GB Fits In
As the only fully integrated fleet solution provider in the UK, FSGB offers everything from driver management to vehicle maintenance and compliance. For businesses managing large vehicle fleets, it’s never been more important to partner with companies that value clarity and compliance. The car finance scandal shows what can happen when trust breaks down — and why FSGB’s approach is the right one for the future.
What You Should Do Now
If you think you’ve been affected by the car finance scandal:
- Wait for the FCA scheme to open in early 2026.
- Check your old car finance agreements — especially between 2007 and 2024.
- Contact your lender if you think you were charged a high rate or misled about commission.
- Don’t use claims companies — you can do it directly for free.
FAQs About the Car Finance Scandal
Who qualifies for the £700 payout?
Anyone who took out a car finance agreement between April 2007 and November 2024 where the dealer earned a hidden commission could be eligible.
Do I need a lawyer or claims company?
No. The FCA has confirmed the scheme will be free to access. You can go directly to your lender without paying anyone.
When will I get my money?
The scheme is expected to start in 2026, with payments made soon after that. If you’ve already complained, you’ll likely get paid sooner.
Can I still go to court?
Yes, but you may get more or less depending on your case. Most people are expected to use the FCA scheme for a faster and simpler process.
Will this affect car finance in the future?
Possibly. The FCA says loans could become slightly more expensive, but overall, the market should be fairer and more transparent.
FAQs About Fleet Service GB
Who is Fleet Service GB?
Fleet Service GB is the UK’s only fully integrated fleet management solution, helping businesses manage vehicles, drivers, maintenance, and compliance all in one place.
What makes FSGB different?
Unlike other providers, FSGB combines technology, data, and expert support into one seamless service — giving fleet operators full control and visibility.
Does FSGB help with finance and compliance?
Yes. FSGB’s integrated system ensures that every part of fleet management — from funding and servicing to driver safety — stays compliant and transparent.
Final Thoughts
The car finance scandal has exposed serious flaws in how car loans were sold — but it’s also a chance to set things right. With the FCA’s scheme offering clear and fair compensation, drivers can finally reclaim what they’re owed.
