Drivers face year-long delay for £1,100 car finance scandal compensation

James Rodger
·2-min read
Drivers face year-long delay for £1,100 car finance scandal compensation
-Credit: (Image: Reach Publishing Services Limited)


Drivers could face a year-long delay for £1,100 car finance scandal payout as thed regulator considers an extension. Firms could get up to a year to respond to mis-selling complaints after a shock court ruling last month, it has emerged, in a major blow for road users.

Martin Lewis, the BBC and ITV star, has previously explained how payouts have been estimated at £1,100. But drivers could be left waiting more than a year for compensation for hidden car finance commissions after a new ruling by the Financial Conduct Authority (FCA).

The regulator has proposed extending response deadlines until December 2025 to allow car finance firms more time to deal with the payout scandal. FCA Chief Executive Nikhil Rathi said: "The Court of Appeal's ruling means many customers who bought a car using finance through a dealer could be owed compensation.

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"We want to make sure that consumers who are owed money get it in an orderly way, and that the motor finance market continues to provide competitive deals for the millions of people that rely on it." The FCA is now consulting on two options for extending complaint-handling deadlines for motor finance firms.

Stephen Haddrill, Director General of the FLA, called the extension "a sensible move" but stressed the need for "an expedited path to the Supreme Court." Recent court cases have confirmed that potentially millions of people buying a new car were hit with commissions on loans that were not clearly revealed to them.

And it is possible that commissions on other loans were also potentially illegal. The judges found that any commission which was not properly disclosed to a borrower was unlawful and that lenders were liable to repay the money to consumers. In doing so, the court has set a much higher bar for the disclosure of commissions that goes beyond existing regulation and has paved the way for a fresh wave of consumer complaints.

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