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Martin Lewis warning as £7.5bn car finance payouts confirmed
The Financial Conduct Authority (FCA) says around 12.1 million agreements could be eligible for payouts, with drivers receiving an average of £829 each under a £7.5 billion redress programme.
Lewis described the move as “unprecedented”, warning that people who delay could lose out or face long waits for compensation.
“You want to be in the group that’s complained, not the group where the lender is having to find you,” he said.
Why Martin Lewis says you must act now
Lewis stressed there are three key reasons to submit a complaint as soon as possible:
- Faster payouts: “You’re likely to be paid out far more quickly sometime in 2026 rather than 2027.”
- Missing records risk: “The lender may no longer have your details you will be far better off if you complain.”
- Outdated personal details: “You might have changed name moved address three times so it could be unable to track you.”
He added that millions have already taken action: “We’ve had 3.6 million complaints most people tell me it’s dead easy.”
Who can claim compensation
The scheme covers car finance agreements taken out between April 2007 and November 2024, including:
- PCP Personal Contract Purchase
- HP Hire Purchase
But it excludes leasing agreements and some low commission deals.
The FCA estimates around 35 percent of agreements were mis-sold, often due to hidden commission structures such as discretionary commission arrangements, which were banned in 2021.
FCA chief executive Nikhil Rathi said the scheme aims to balance fairness and speed: “It will put £7.5 billion back into people’s pockets. Now we need everyone to get behind it and ensure millions get their money this year.”
He added: “Payouts should not be delayed any longer, especially as household bills come under greater pressure.”
Why payouts have increased
While the average payout has increased to £829, the overall compensation pot has dropped from earlier estimates due to:
- Fewer eligible claims now estimated at 12.1 million
- Stricter rules on low commission deals
- Assumptions that fewer people will claim
Martin Lewis says the most important step is simple make a complaint even if you are unsure: “The only way you can know if you were mis-sold is to complain.”
He also warned that relying on lenders to contact you could leave you waiting longer or missing out entirely.
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When payouts will happen
- Some payments could begin this year
- Most claims expected to be settled by the end of 2027
- Earlier complaints likely to be processed first
With billions set to be returned to drivers, this is one of the largest consumer compensation schemes ever seen in the UK.
But as Martin Lewis makes clear, those who act first are likely to benefit most: “You want to complain now.”