12.1 Million UK Drivers Were Mis-Sold Car Finance — Here is How to Get Your £829 Payout – AirdropHunt

If you bought a car on finance in the UK between 2007 and 2024, you might be owed money. The Financial Conduct Authority (FCA) has announced a massive compensation scheme affecting 12.1 million motor finance deals.

The average payout? Around £829 per person.

What Happened?

Car dealers were receiving hidden commissions from lenders based on the interest rate they charged customers. The higher the rate, the bigger the dealer cut. This arrangement — called discretionary commission arrangements (DCAs) — was often never disclosed, meaning buyers were pushed into paying more interest than necessary.

The FCA banned these deals in 2021, but millions of contracts made between April 2007 and November 2024 are now eligible for redress.

The Numbers

12.1 million motor finance deals qualify (down from initial 14.2 million estimate)
£9.1 billion total cost to lenders
£7.5 billion going directly to consumers
£1.6 billion in administrative costs
Average payout: approximately £829 per person

How to Claim

You do not need a lawyer. The FCA scheme is designed to be straightforward:

Already complained? Your lender must contact you within three months of implementation
Haven’t complained yet? Firms have six months to proactively contact eligible customers
Not contacted? You can still complain directly to your lender until end of August 2027
Unhappy with the amount? Use the free Financial Ombudsman Service to challenge it

Two Compensation Periods

The scheme is split into two parts due to legal considerations:

April 2007 – March 2014: Lenders have until end of August 2026 to process
April 2014 – November 2024: Lenders have until end of June 2026 to process

What This Means for You

If you had a car loan: Check if your deal had hidden commissions — most did
If you are currently financing: Your terms are likely fairer now (DCAs were banned in 2021)
If you’re overseas: This is a UK-specific scheme, but similar practices may have occurred in other markets

Consumer group Consumer Voice says the scheme does not go far enough, calling it a case where regulators “let lenders off the hook.” The Finance and Leasing Association argues the scheme is too broad. Either way, if you are eligible, the clock is ticking.

Sources: BBC News | BBC (How compensation works)