Car finance compensation payouts increased but many don't realise they're owed

Millions of Brits could be due an increased payout of £830 in the wake of a major announcement into the car finance mis-selling scandal.

Even with this bumped-up figure, legal firm HD Law has questioned whether drivers are getting what they're really owed, as compensation payouts for those wronged in the scandal edge closer.

According to HD Law's track record, drivers could receive over twice the £830 figure suggested by the Financial Conduct Authority (FCA).

Compensation is expected to be paid on more than 12 million car finance agreements mis-sold between 2007 and 2024, it was announced late last night.

Although the FCA said the number was fewer than originally proposed, the average payout has increased to around £830 per agreement. The FCA estimates that 75% of eligible consumers will make a claim. If so, total redress paid would be £7.5billion.

The FCA had previously said that the average payout for drivers under the scheme will be about £700, with the total cost potentially more than £8bn. However, the new £830 figure doesn’t reflect what individual consumers could be owed if they pursue their claim through the courts.

If you bought a car, van, or motorbike on PCP or Hire Purchase between 2007 and 2024, then you may be one of the millions owed money.

Around 14 million agreements were mis-sold and under the FCA's proposed scheme, you could be due compensation if you took out motor vehicle finance on a car, van, motorbike or campervan between 6 April 2007 to 1 November 2024.

HD Law seeks a full refund of the commission paid, and because a judge can review the entire lending agreement, payouts can be substantially larger.

This approach is why HD Law customers currently receive an average of £1,846.23* per car