A long-promised compensation scheme that was meant to help millions of drivers across the UK is now in trouble. What started as a step toward justice for people mis-sold car finance is now facing growing uncertainty. Rising costs, legal concerns and pressure from lenders have raised new fears that payments may not begin in 2026 as planned. The estimated cost of the scheme has now climbed to more than £20 billion.

For drivers who trusted car dealerships to give them a fair deal, the idea of having to wait even longer to be compensated is incredibly disheartening.

A Decade of Mis-Selling That Took a Personal Toll

From 2007 to 2024, many drivers unknowingly signed up for car finance deals that were not in their best interest. These were often personal contract purchase (PCP) deals, which became one of the most popular ways to buy a vehicle.

In many of those cases, dealerships and brokers received extra payments for arranging loans with higher interest rates. These hidden commissions were rarely, if ever, explained clearly to the customer. As a result, people were unknowingly agreeing to deals that cost them far more than they should have.

The Financial Conduct Authority (FCA) banned this type of commission in 2021. But by then, many drivers had already spent years overpaying. As people started to learn more, claims poured in from those trying to get back money they should never have had to spend in the first place.

A Growing Price Tag That Puts the Scheme at Risk

When the compensation plan was first announced, the expected cost was around £11 billion. Since then, that number has nearly doubled. Some banks are now saying the scheme might include people who were not financially harmed, and they are questioning whether the plan is still workable or fair.

Lenders have warned that if they are required to set aside billions in reserves, they may have to reduce how much car finance they offer in future. This could make it harder for families, essential workers and people in rural areas to get approved for loans when they need a car.

A car is not a luxury for millions of households. It is how people get to work, take children to school or visit relatives in need. More restricted access to finance could leave many families strapped for cash when money is tight.

Payout Timeline Could Be Pushed Back

The FCA had originally aimed to finalise the scheme by March 2026, with compensation to follow shortly after. But as costs continue to rise and financial institutions raise concerns, that timeline is now at risk.

People involved in the process say the plan still needs clearer rules and a structure that is easier to manage. Without that, there is a real chance that legal arguments or administrative problems could slow everything down. For the drivers who have already waited years, any further delay is more than just an inconvenience. It feels like their chance at fairness keeps slipping further out of reach.

Behind Every Claim Is a Personal Story

It is easy to talk about billions of pounds, but each car finance claim comes from someone with a real life, a real family and a real struggle. Some are parents juggling childcare and work. Others are key workers who rely on their car every day. Most of them trusted their dealership to guide them, without ever realising the deal they were signing came with hidden costs.

Some drivers have been paying inflated monthly bills for years and still do not realise they were mis-sold their agreement. Others are only now learning the full details of what happened. At a time when so many are already counting every pound, finding out you were taken advantage of makes the situation even harder to bear.

If you took out car finance between 2007 and 2024, it is worth checking your agreement. While most current claims involve PCP finance, other types of loans could also be affected, especially if hidden commissions were involved.

What Comes Next?

The FCA is now reviewing responses from banks, legal teams and consumer advocates. A revised version of the redress plan is expected to be published in the coming months.

The regulator has said it wants to ensure drivers get the compensation they are owed. But it also needs to make sure the scheme can be delivered in a way that is sustainable for the wider financial system. While changes are likely, many campaigners believe the most important thing is keeping the focus on the people who were mis-sold.

With the true scale of the car finance scandal now clearer than ever, more people are stepping forward to ask for the justice they deserve. As 2026 approaches, drivers across the UK are hoping the next update brings answers and action, not another delay.