LONDON — Around 12 million motorists can now pursue compensation through two main routes [1] after the Financial Conduct Authority (FCA) launched its scheme addressing the car finance scandal involving mis-sold car finance agreements. The regulator said average payouts could reach £829 per driver [2] as part of a nationwide redress programme.

The FCA confirmed its long-awaited plan will return an estimated £7.5 billion to consumers [3] affected by unfair commission practices on car finance deals. The scheme forms a central part of the latest car finance compensation update and marks one of the largest redress efforts in UK financial services.

Route one: Automatic car finance refunds

Under the FCA car finance scheme, most consumers will be contacted about a car finance refund. All lenders will be assessing historic agreements and looking to identify any customers they overcharged, contacting them individually without a car finance claim being submitted.

This will cover a large volume of personal contract purchase deals, so a high proportion of total payments in 2026 will be made up of PCP claims and PCP refund cases. However, motorists are advised to still run a car finance refund check to ensure they are eligible, and that they don’t miss the car finance claims deadline for car finance mis-selling.

Route two: Making a car finance claim

Alternatively as a consumer you may wish to make a claim for mis-sold car finance yourself. This could be by submitting a complaint yourself directly to the lenders or taking court action over mis-sold car finance. Sometimes filing a complaint yourself with regards to mis-sold car finance or a PCP claim can actually entitle you to a larger amount of compensation. For example if you have suffered further losses or interest.

Role of claims management companies

Claims management companies may be able to assist you as the FCA car finance scheme progresses. There may also be potential for them to help with car finance claims and PCP claims as well, though this could be where claims are more complicated or where you want support through the process. Claims companies may well charge you for this service so this is something you should consider.

Deadlines and next steps

Millions of drivers have been warned to act now over car finance claims as the FCA has confirmed there will be a deadline. There is set to be billions of pounds paid out under payouts 2026 and customers are being encouraged to check their deals. Drivers affected by unfair car finance charges are being urged not to miss out on any payouts.

The regulator said the scheme is designed to deliver fair outcomes while holding firms accountable for historic practices linked to the car finance scandal.

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References:

1. Around 12 million motorists can now pursue compensation through two main routes - https://www.independent.co.uk/tv/news/martin-lewis-car-finance-compensation-claim-b2949237.html
2. The regulator said average payouts could reach £829 per driver - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
3. The FCA confirmed its long-awaited plan will return an estimated £7.5 billion to consumers - https://www.fca.org.uk/publication/policy/ps26-3.pdf