Car Finance Compensation 2025: What You Need to Know

The Financial Conduct Authority (FCA) has launched a major consultation on car finance compensation that could see millions of UK drivers refunded for mis-sold loans dating back to 2007. The proposed redress scheme, expected to begin in early 2026, would cover around 14 million car finance agreements and deliver average payouts of about £700 each. The FCA’s plan targets unfair commission arrangements that caused many borrowers to overpay and promises a free, straightforward process with no need for claims management firms. In this blog, we explore who may qualify, what the scheme covers, and how to prepare before the window for redress opens.