Brits who bought car finance may be owed £1,400** as £8.2bn* payout scheme nears

Brits who believe they were mis-sold car finance between 2007 and 2024 could be entitled to compensation averaging up to £1,400 per customer**.

Car buyers could be in line for more than £8 billion* in payouts under a compensation scheme proposed by the City watchdog, the Financial Conduct Authority (FCA). The authority estimated that the finance arms of banks and carmakers could pay out billions to compensate some car buyers impacted by undisclosed commissions between April 2007 and November 2024. Such buyers were not fully informed about the commission’s lenders paid to brokers, who were usually car dealers.

The predicted figure includes £8.2 billion* in compensation. If you think you might be among those mis-sold car finance in that period, you can contact Locksley Law to carry out a free, no-obligation agreement check.

Banks are braced for significant payouts, with Close Brothers having told lenders it has set aside £165m and Santander £295m, Reuters reports.

Lloyds, the biggest car finance company through its Black Horse brand, has set aside £1.95 billion, according to the BBC. Carmakers such as Mercedes-Benz and BMW have also set aside more than £500 million, the Financial Times reports.

In light of the potentially massive payouts, we've answered burning questions you may have.

The car finance scandal emerged after it was revealed that some lenders paid undisclosed “secret” commissions to dealerships. This allowed dealers to set interest rates on finance agreements, with higher rates earning them larger commissions. As a result, many customers may have agreed to finance deals with inflated interest charges.

An investigation by the FCA found that 44 percent of car finance agreements sold between April 2007 and