Money expert Martin Lewis has alerted motorists who purchased vehicles between 2007 and 2021 that they may be entitled to "billions" in compensation. Lewis made this announcement on his podcast, highlighting that a Financial Conduct Authority (FCA) investigation could enable drivers to make a claim. He emphasized that millions of individuals who bought cars under a PCP or finance agreement might be affected. Lewis also suggested that car finance payouts could reach the levels of PPI compensation once the FCA completes its probe.
Financial experts predict higher costs for the industry
The FCA has confirmed that it will investigate deals made between 2007 and 2021, leading financial experts to anticipate a substantial increase in the total cost of the compensation bill. Lenders may be compelled to pay significantly more. According to analysts at Jefferies, the industry's total costs could amount to around £13 billion, surpassing previous estimates of approximately £4 billion.
Updates and scale of the compensation programme
Martin Lewis has promised to provide further updates within 10 days as he works on gathering the most accurate information. He revealed that a rough calculation suggests that tens of billions of pounds could be returned to motorists. Lewis explained that lenders offering finance options were increasing the cost of finance products to receive higher commissions, without disclosing this information to consumers.
FCA investigation prompted by numerous complaints
The FCA initiated its investigation following a high number of complaints made to motor finance companies regarding compensation for commission arrangements. While firms have rejected most of the complaints, stating that they have not acted unfairly or caused financial losses for customers, the Financial Ombudsman Service ruled in favor of motorists in two recent cases. The FCA expects this to result in a significant increase in further complaints.
Other advice from Martin Lewis
Aside from the car finance compensation issue, Martin Lewis has recently shared other valuable advice. In a recent episode of The Martin Lewis Money Show Live, he warned thousands of individuals that they could be owed up to £40,000 in backdated bereavement support. He urged people not to miss the "rock hard deadline" of February 8 to claim this support, emphasizing its importance for those in vulnerable positions.
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