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The Financial Conduct Authority could slash some drivers' car finance payouts to £517. The FCA said in August that it estimated “most individuals will probably receive less than £950 in compensation per agreement”. The FCA announced earlier in October that it expects eligible consumers to receive an average of about £700 an agreement, with many receiving more than that “and a large number receiving less”. FCA documents suggest that for DCAs, the mean proposed payout (the arithmetical average) would be £665, while the median figure (the middle value in a dataset) would be £517. READ MORE Free bus passes could be extended to one group of under 66s For the second category named above, the figures are £686 and £526, and for the third they are quite a bit higher: £1,108 and £960. On average, people’s payouts will be boosted by 2% of interest. The regulator said this was a complex issue and “not everyone will get everything they would like”. The FCA is consulting on extending the deadline for firms to send a final response to motor finance complaints to July 31, 2026. It added: "If we introduce a redress scheme, we expect to publish our policy statement and final rules by early 2026. This timetable depends on the feedback we receive and firms and other parties working constructively together and with us. "The scheme would launch at the same time, with consumers starting to receive compensation later in 2026." The FCA stated that the scheme would cover motor finance agreements taken out between April 6, 2007, and November 1, 2024. Drivers will receive compensation if they weren't informed of at least one of three arrangements between the lender and the broker. Lenders gave dealers the power to set the interest rates, with dealers getting more commission the higher the rate. This allegedly gave dealers an incentive to overcharge customers. It is the lenders – typically banks – who are on the hook for the compensation. The FCA estimates that 11.4m such loans are likely to be eligible for a payout.
