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Car finance: Compensation payments delayed until next year

Source

www.bbc.co.uk

Published Source updated (as of )

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A young woman with short black hair and a white top sits in the driver's seat of a white hatchback, and looks at paperwork on a clipboard held by the car salesman, who wears a blue t-shirt and glasses.

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Car finance compensation payments delayed until 2027 due to legal challenges

Overview

Millions of drivers expecting compensation for mis-sold car finance agreements must wait until at least 2027 following legal challenges to the Financial Conduct Authority's scheme. The FCA expects average payouts of £829 per mis-sold agreement, affecting about 12 million car loans taken out between April 2007 and November 2024. Hearings are scheduled for February 2027, pausing compensation calculations and payments until the legal process concludes.

Key points

  • Car finance compensation payments have been delayed until at least 2027 due to upcoming legal challenges.
  • The Financial Conduct Authority (FCA) estimates average payouts of about £829 per mis-sold agreement.
  • The delay follows legal challenges to the compensation scheme, with a hearing scheduled in the Upper Tribunal for February 2027.
  • The compensation scheme applies to approximately 12 million car loans taken out between April 2007 and November 2024 involving discretionary commission arrangements and unfair contracts.
  • Consumers who have already made complaints do not need to take further action, while others are advised to contact their loan provider directly rather than using claims management companies.
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