British individuals who suspect they were sold car finance improperly between 2007 and 2024 may be eligible for compensation averaging around £1,400 per customer**.
Car purchasers could potentially receive over £8 billion* in compensatory payments under a restitution program suggested by the Financial Conduct Authority (FCA), the City’s regulatory body. The FCA projected that banks and car manufacturers’ financial divisions might disburse billions to reimburse certain car buyers affected by undisclosed commissions from April 2007 to November 2024. These buyers were not fully apprised of the commissions lenders paid to brokers, typically car dealers.
The anticipated sum encompasses £8.2 billion* in compensation. If you suspect you might fall within the group of individuals who received mis-sold car finance during that timeframe, you can reach out to Locksley Law for a complimentary, no-obligation agreement evaluation.
Financial institutions are preparing for substantial payouts, with Close Brothers having earmarked £165 million and Santander £295 million, according to reports from Reuters.
Lloyds, the foremost car finance company under its Black Horse brand, has set aside £1.95 billion, as reported by the BBC. Luxury car manufacturers like Mercedes-Benz and BMW have also allocated over £500 million, the Financial Times states.
In light of the potentially significant compensations, we have addressed some pressing questions you may have.
The car finance controversy arose following the revelation that some lenders were providing undisclosed “secret” commissions to dealerships. This practice enabled dealers to set interest rates on finance agreements, with higher rates resulting in larger commissions for them. Consequently, many customers may have agreed to finance deals with inflated interest costs.
An examination by the FCA revealed that 44% of car finance agreements sold from April 2007 to November 2024 could be deemed unfair due to inadequate disclosure. The regulator stated that “Motor finance companies violated laws and regulations in effect at the time by failing to disclose crucial information. This led to injustices, with consumers being deprived of the opportunity to negotiate or secure a better deal and, in some cases, paying more for their loan.”
You can access the FCA report here.
A 2024 ruling by the Court of Appeal raised concerns about significant compensation liabilities for lenders, with some estimates within the industry suggesting potential costs up to £44 billion. However, the Supreme Court overturned the bulk of that ruling in August last year, reducing the liability for lenders.
Following this decision, the FCA is anticipated to formulate the guidelines for an upcoming redress program.
As per the proposed FCA redress initiative, lenders may be compelled to disburse £8.2 billion*, with some projections reaching up to £11 billion*. Impacted customers could receive an average compensation of approximately £700* per claim.
Since its establishment in October 2025, Locksley Law clients have on average filed more than two claims each. As stated in the FCA release, each claim could result in compensation of up to £700*, potentially leading to an average client receiving payouts of up to £1,400**
Individuals who believe they were mis-sold car finance agreements between April 2007 and November 2024 may be eligible to seek compensation. This includes agreements falling under Hire Purchase (HP) and Personal Contract Purchase (PCP) categories that meet certain criteria:
If you suspect you were mis-sold car finance, the FCA is proposing a no-cost redress program set to launch in 2026.
However, participation in this scheme will not be obligatory. Consumers retain the option to pursue legal recourse through the courts if they wish. There is no obligation to file a claim through a law firm or claims management company.
If you had a PCP or HP agreement between 2007 and 2024, you can contact Locksley Law for a complimentary, no-obligation agreement assessment to determine if you are eligible for an average compensation of £700*. Visit <a href="https://forms.locksley
