Update on £829 payment for millions who bought car finance between 2007 and 2024
Drivers waiting to see if they're eligible for car finance compensation should expect to be left waiting a little longer, as the Financial Conduct Authority (FCA) confirms the case won't be heard for several months.
Last year, the FCA confirmed that a whopping 12.1 million car finance loans, sold between 6 April 2007 and 1 November 2024, were mis-sold and therefore eligible for financial compensation.
The payout is expected to be around £7.5 billion, with eligible Brits expected to receive a payment of £829.
However, a new FCA update has revealed that the legal case won't be heard until December or February next year, with a judgement on the case expected to follow in the months after.
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If the ruling isn't upheld, the FCA expects Brits to receive their payments in 2027.
Should the companies involved ask for further expert information, then payouts could be pushed back to 2028 or even later.
If the scheme is overturned, the FCA will then advise firms to resolve their complaints individually within eight weeks, adding that customers who believe they haven't been treated fairly should take their complaints to the Financial Ombudsman Service.
As for lenders, they do not need to calculate compensation owed at this time. As for customers who've complained but do not qualify for compensation, lenders are expected to notify them by:
- 18 November 2026, if your agreement began on or after 1 April 2014 and you complained by 30 June 2026.
- 18 January 2027, if your agreement began before 1 April 2014 and you complain by 31 August 2026.
How to know if you were mis-sold car insurance?
The claim came about after the FCA banned deals where car dealers received commission from lenders based on interest charged in 2021.
Known as Discretionary Commission Arrangements (DCAs), this means the interest was increased to pay the dealer or broker extra commission.
Meanwhile, customers often weren't told about these and would be paying too much.
Want to know if you're eligible to make a claim? Martin Lewis previously made a checklist which outlines whether or not you're eligible on his MoneySavingExpert website:
- Motor vehicle finance: Car, van, motorbike & campervan (not caravans).
- Eligible dates: Finance from 6 Apr 2007 to 1 Nov 2024.
- Finance types: Personal Contract Purchases (PCP) & Hire Purchase (HP) - not leased cars.
- Vehicles for personal use. Or sole trader or small partnerships for work if finance is under £25,000.
- Still applies if owner passed away, vehicle paid off or no longer owned.
- Had multiple eligible car finance deals? You may be due multiple payouts.
How to make a claim
Guidance from the FCA says the first port of call should be to contact your lender directly, with a full list of lenders and their contact details available on its website.
In order to find out who your lender is, have a look through old bank statements or contact the car dealership you purchased the car from.
You should then receive an acknowledgement of your complaint, and then your lender has three months to tell you if you're eligible for compensation, and how much.
You then have one month to accept or challenge the compensation amount, and after you've done so, lenders have one month to pay you.
Brenna Cooper