Car finance scandal: Are you eligible for compensation and how much money could you receive?

GB News has answered some of the most important questions relating to the car finance scandal redress scheme to help motorists get compensation.

Am I eligible?

The FCA stated that the scheme would cover motor finance agreements taken out between April 6, 2007, and November 1, 2024.

Drivers will receive compensation if they weren't informed of at least one of three arrangements between the lender and the broker. This includes:

1. A discretionary commission arrangement - This allowed the broker to adjust the interest rate paid by the customer, allowing them to receive a higher commission.
2. A high commission arrangement - This is 35 per cent of the total cost of credit and 10 per cent of the loan.
3. A contractual arrangement - This is between the lender and the broker, which provides "exclusive or near exclusive rights" to lenders to provide credit.

How much could I receive?

Despite early estimates suggesting that impacted motorists could receive around £1,100, the FCA claims the redress scheme will provide £700.

The regulator states that around 85 per cent of consumers are expected to participate in the scheme, which is estimated to result in a total redress of £ 8.2billion.

However, in the event that 100 per cent of drivers intend to make a claim, motor finance firms could owe up to £9.7billion in compensation.

If there is a 70 per cent uptake of the claim, redress will be total around £6.8billion.

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When can I expect compensation?

The FCA is consulting on extending the deadline for firms to send a final response to motor finance complaints to July 31, 2026.

It added: "If we introduce a redress scheme, we expect to publish our policy statement and final rules by early 2026.

"This timetable depends on the feedback we receive and firms and other parties working constructively together and with us.

"The scheme would launch at the same time, with consumers starting to receive compensation later in 2026."

Do I have to do anything?

Around four million complaints are believed to be with firms already, with the FCA proposing that lenders contact consumers who complained before the scheme starts within three months.

Motorists will automatically be included unless they opt out. However, drivers cannot opt back in.

Drivers who have not complained when the scheme starts should be contacted within six months, at which point lenders will ask if they want to opt in.