Motorists who were mis-sold car finance are set to receive “hundreds, not thousands” of pounds in compensation, according to personal finance oracle and part-time harbinger of middle-class rage, Martin Lewis.
Reporting from down the M62, it’s believed this payout could be enough to cover either one tank of petrol or a three-week supply of Greggs steak bakes, but not both, and certainly not your dignity if you financed a 2008 Vauxhall Zafira on 29% APR.
The revelation follows a Supreme Court decision on “discretionary commission arrangements” a term which here means “car dealers helping themselves to a hidden slice of your interest payments like it’s a family buffet at Toby Carvery”. Between 2007 and 2021, thousands of customers were blissfully unaware their finance agreements were laced with enough hidden charges to make a payday loan look like a charity raffle.
While Lewis estimates up to 40% of drivers may be owed money, he warns payouts are likely to hover around £950 per agreement. That’s assuming your dealer wasn’t also charging you a ‘breathing surcharge’ and £200 to clean the showroom hamster cage.
In a move described as “marginally less useful than shouting into a bin”, the Financial Conduct Authority will begin a six-week consultation in October, with compensation potentially arriving in 2026. Just in time for most affected vehicles to have decomposed into their component rust particles.
The Finance and Leasing Association, basically the car finance industry’s polite face, has raised “concerns” about how the compensation scheme could function, particularly since most lenders from the early years of the scandal have since disappeared into corporate black holes or rebranded as “ethical lending unicorns”.
Meanwhile, stock markets responded in classic style, rewarding lenders for surviving the regulatory equivalent of being told off by a substitute teacher. Lloyds rose 7%, while Close Brothers soared 25%, presumably on the news they’d dodged having to return all the proceeds of a decade-long game of ‘interest rate roulette’.
As for drivers, Lewis advises contacting your lender directly rather than using claims management companies, who are reportedly circling like seagulls over a dropped McChicken Sandwich, demanding 30% of the payout for doing less work than a pothole repair team during a hosepipe ban.
So if you think you’ve been shafted by a smiling man in a shiny suit circa 2010, hold tight. Justice is coming. Slowly. Probably by bus.
