Car finance compensation payments delayed until next year
Summary
Millions of drivers who were sold car finance deals unfairly will have to wait until at least 2027 to get compensation. The Financial Conduct Authority (FCA) announced that average payments could be about £829, but legal issues have delayed the process.Key Facts
- Around 12 million car loans from April 2007 to November 2024 are affected by the FCA’s scheme.
- The FCA banned car dealer commissions based on interest rates in 2021 because they could lead to higher charges for buyers.
- Some contracts were unfair due to very high commissions paid to dealers or exclusive deals between lenders and dealers.
- The total compensation cost including administration could reach £9.1 billion.
- People who already complained to their lenders do not need to do anything more.
- Those who have not complained should contact their car loan provider directly, not third-party claims companies.
- Lenders will contact customers in stages: those with agreements after 2014 by the end of this year, and older agreements by February 2027.
- Consumers should watch out for scams offering fake compensation.
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