Motor finance giant boosts provisions as car finance compensation and payouts 2026 expectations rise

LONDON — Ford has set aside £155 million to cover potential car finance compensation [1] as car finance claims continue to grow amid the escalating car finance scandal. The provision, linked to its finance arm, reflects increasing industry exposure to mis-sold car finance driven by undisclosed commission arrangements.

The increase, from an earlier £61 million estimate, highlights mounting pressure on lenders as more motorists prepare to submit a car finance claim. The issue centres on car finance mis-selling, where hidden commissions paid to dealers may have led to higher borrowing costs without customers’ knowledge.

The Financial Conduct Authority is expected to confirm its redress scheme after markets close today, March 30 [2], outlining how car finance compensation and payouts 2026 will be delivered. The scheme is expected to cover agreements taken out between April 6, 2007, and November 1, 2024.

The total cost of the car finance scandal to the industry is expected to top £8 billion in compensation payments [3], with admin costs also being applied meaning that the total will be higher. In addition, other major lenders in the motor finance sector, including Lloyds and other vehicle finance companies, have also put funds aside to deal with anticipated car finance claims and PCP claims. If you were mis-sold car finance you could be able to make a car finance claim, a PCP claim or multiple PCP claims, depending on how many agreements you have signed up for. The types of finance that can be mis-sold for eligibility for a claim include personal contract purchase and hire purchase deals where cars, vans or other vehicles are purchased. The resulting payout could be in the form of a car finance refund or PCP refund.

As the FCA scheme is expected to be a guaranteed way of consumers getting car finance compensation, some have started legal action in the courts for a car finance refund after a car finance refund check from a finance claims expert. A car finance claim or PCP claim that is made through the court process may have a better chance of getting a higher payout which includes a greater amount of interest depending on the outcome. However, this is not guaranteed and this process is much more complex.

It is also possible that there could be further legal action taken against by the lenders, which would also affect the speed of the car finance claims and when they get any car finance payouts 2026.

A key few weeks may lie ahead in the car finance scandal, as more come to a decision as to whether or not to make a car finance claim over car finance mis-selling, with the lenders continuing to increase financial provisions for the scheme, with the regulator also expected to make a decision imminently.

_________

References:

1. Ford has set aside £155 million to cover potential car finance compensation - https://www.thetimes.com/business/companies-markets/article/ford-155m-car-finance-mis-selling-scandal-swg39bsmc
2. The Financial Conduct Authority is expected to confirm its redress scheme after markets close today, March 30 -https://www.fca.org.uk/news/statements/timing-fca-motor-finance-announcement
3. The total cost of the car finance scandal to the industry is expected to top £8 billion in compensation payments - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme