Millions of drivers set for £829 payout soon as car finance compensation scheme confirmed

TRENDING Stories Videos Your Say There had been some fears that lenders and major banks would query the redress scheme over concerns that drivers were not receiving how much they should be owed.However, the FLA has confirmed that it will proceed with the compensation, highlighting the importance of motorists who have suffered loss from the scandal.Shanika Amarasekara, chief executive of the FLA, described the scheme as being the right way to ensure that drivers receive suitable levels of redress.She added: The FLA has undertaken a detailed review of the FCA's proposed scheme in close consultation with our members, alongside internal and external economists and legal counsel.We continue to have concerns about aspects of the scheme, but our priority is that a practical solution be reached that ensures timely compensation for consumers while giving the motor finance industry and the wider market clarity and finality on this issue.Ms Amarasekara said it was the FLA's responsibility to consider the impact of the compensation scheme, given that it is the leading industry trade body.She noted that the FLA would continue to engage constructively with the FCA to roll out the scheme effectively.Speaking after the announcement of the redress scheme, Nikhil Rathi, CEO of the FCA, outlined that lenders and banks could start paying compensation as soon as they wanted.LATEST DEVELOPMENTSLabour urged to scrap 'dishonest double taxation' as petrol and diesel face misery at pumpsBritish drivers call for tougher parking fines to ensure a 'real deterrent' against rulebreakersChinese brand BYD debuts world's fastest car and EV that charges in 5 minutes - 'Watershed moment'However, he admitted that this was a very unlikely scenario as companies would want to look over the terms of the scheme and consider appealing against it.FCA guidelines suggest that the vast majority of car finance claims will be settled by January 2028, while some payments are expected to begin later this year.A short implementation period has been rolled out to ensure lenders and banks can prepare to pay back compensation to affected motorists.This will be from June 30, 2026, for loans taken out from April 1, 2014. A second deadline for loans agreed earlier will end on August 31, 2026.Tom Jervis, consumer reporter at Auto Express, said: Ultimately, it's only right that the finance industry has stepped aside to enable the FCA's proposed redress scheme to be executed as laid out. At its core, this is about compensating consumers who were mis-sold and the current plans will set about doing just that, whilst also making some concessions on behalf of the finance industry in order to protect it from irreparable damage.Mr Jervis said he hoped that motorists would be protected from being overcharged on future policies as lenders try to recoup costs lost to the redress scheme.He described this as being crucial as the majority of privately purchased vehicles are now done so through car finance. Our Standards: The GB News Editorial Charter