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 an increased payout following the latest finance announcement
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 financed.
According to the firm, which has a Trustpilot score of 4.7, motorists could claim more still if they had several car finance deals during that period.
You don’t need to wait for the lender to contact you. In fact, they might not have your current address. You can check your eligibility in 60 seconds today with HD Law. You just have to enter your postcode and a few details, then the free tool will automatically pull through all your Personal Contract Purchase deals from 2007–2024.
Kevin Durkin, Director of HD Law, said: “The FCA has chipped away at this until it’s a number two crew cut. They’ve reduced the number of eligible claims and set a redress figure that is effectively equivalent to putting lipstick on a pig.
“In the landmark Johnson v FirstRand case, the commission was a staggering 55% of the credit charge. The Supreme Court ruled that was an unfair relationship.
“By comparison, the FCA’s new 39% threshold feels like a calculation designed to cap the banks’ liability rather than return what is legally owed to the consumer. For many, convenience is going to cost them over £1,000 in lost compensation.”
If you believe you were mis-sold car finance, the FCA is proposing a free redress scheme expected to launch in 2026.
However, using the scheme will not be mandatory. Consumers may still choose to pursue legal action through the courts instead. You are under no obligation to make a claim via a law firm or claims management company.
For those who prefer to use the FCA scheme, the regulator currently provides a template letter on its website for drivers who think they were affected. The FCA’s website offers guidance for those who believe their car, motorbike or van finance agreement was mis-sold during the relevant period. Once the scheme is in place, lenders will contact eligible customers with next steps.
Lenders will have three months from the end of the implementation period (June 30 this year for loans taken out from April 1, 2014, and until August 31 for those agreed earlier) to inform complainants whether they’re owed compensation and how much. This means that people who have already complained or who complain before the end of the relevant implementation period will be compensated sooner.
It must have been a Personal Contract Purchase or Hire Purchase (leased cars do not apply), and the vehicle was for personal use.
Those who are owed money were the victims of discretionary commission arrangements, which were finance agreements between car dealers and lenders. Dealers received commissions from lenders based on the interest rate charged to customers, which often led to customers being charged higher rates. These kinds of deals were banned by the FCA in 2021.
*£1,846.23 is the average claim value per agreement of the partner law firm of Genius Group, HD Law as of July 31, 2025.
