Money expert Martin Lewis has outlined when drivers could receive compensation worth an average of £829 following the car finance mis-selling scandal. Earlier today, the Financial Conduct Authority (FCA) confirmed its next steps regarding compensating millions of motorists who may have been unknowingly overcharged due to hidden commission arrangements on car loans between 2007 and 2024.
It is an announcement that many motorists have waited years for, and will see lenders facing a bill of £7.5 billion. The regulator is expected to publish the final rules for the compensation scheme in late March 2026. Once the rules are confirmed, lenders will be given a three-month implementation period to prepare the system, although this could stretch to five months for older agreements. Only after this stage is complete will payouts begin.
According to guidance shared on the MoneySavingExpert website, the timeline for compensation will depend on whether customers have already complained.
For those who have already submitted complaints – part of the opt-out scheme – firms should contact them within three months of the scheme starting. Customers will be told whether they are owed money and how much, and will be able to accept the payout immediately. They can also choose to reject the offer and pursue legal action instead.
Those who have not complained – part of the opt-in scheme – will be contacted later. Firms are expected to reach out within six months of the scheme launching, with payments due within 17 months of the scheme start date.
Alex Neill, co-founder of consumer rights group Consumer Voice, said: “Our advice to drivers is don’t wait, complain now. Lenders are supposed to contact you but there are pitfalls associated with waiting. Complaining now is really important because it could mean you get your compensation sooner.
“Be cautious of unexpected calls, texts or emails offering guaranteed compensation. There are scams and unscrupulous firms already operating and this is only set to get worse.”
This timeline suggests some drivers could still face a lengthy wait before receiving any money, with the entire process potentially stretching well into 2027 or beyond, Lewis notes.
