Finance1 min read

Drivers may get compensation offers before car finance saga ends

By · Published by Everything Blog

In short

Barclays has confirmed it will begin making immediate early payout offers, with other lenders anticipated to follow suit. While the Financial Conduct Authority welcomes these resolutions, it expects only a minority of claimants will receive them and plans to monitor firms to ensure terms are transparent. Affected consumers retain the right to decline these initial sums and await the central scheme. In total, approximately 12 million vehicle finance agreements spanning from April 2007 to November 2024 are expected to be eligible for redress.

Key points

  • Affected borrowers are under no obligation to accept early lender offers and can choose t…: Affected borrowers are under no obligation to accept early lender offers and can choose to wait for the central scheme.
  • The regulatory watchdog will actively monitor participating lenders to ensure early settl…: The regulatory watchdog will actively monitor participating lenders to ensure early settlement terms remain fair and completely transparent.
  • About 37% of car loan agreements between April 2007 and November 2024 involved hidden dis…: About 37% of car loan agreements between April 2007 and November 2024 involved hidden discretionary commission arrangements.

Sources checked by our analysis pipeline: 1

- Published

Drivers may be offered compensation from lenders ahead of the next legal battle in the car finance mis-selling saga.

Regulator the Financial Conduct Authority (FCA) said it would welcome lenders making settlement offers as long as customers were not given a worse deal than under its proposed central scheme.

That scheme is facing a legal challenge, to be heard in February, with resulting compensation unlikely to be paid until late next year.

But Barclays has confirmed it will make early compensation offers from now, with others expected to follow suit.

The FCA said it would still only expect a minority of claimants to be made early offers, with most having to wait for the outcome of next year's court case.

Stephen Braviner Roman, the FCA's general counsel and co-lead on the motor finance project, said: "Fair settlement offers could result in some people getting money sooner. It's clear they want the choice.

"Anyone who wants to wait can, and there's no obligation to agree to the offer. We'll closely monitor firms making offers and expect them to be…

Finance