Martin Lewis has issued an update on the car finance compensation case
Martin Lewis was speaking about people claiming for being mis-sold car finance(Image: ITV)
Martin Lewis has provided an update on the ongoing car finance compensation case. Thousands of vehicles purchased between April 6, 2007 and November 1, 2024 may have been subject to agreements that breached financial regulations.
The Financial Conduct Authority (FCA) has proposed ‘mass redress’, with approximately £8billion set aside in compensation to cover an estimated 14million agreements. The regulator anticipates the average compensation payment will be around £700 per person.
The FCA’s consultation concluded in December 2025, with a pause on handling all cases due to be lifted on May 31, 2026. The financial watchdog will outline its approach to motor finance redress on Monday, March 30 after the markets close, likely around 5pm.
ITV‘s Martin Lewis Money Show Live tonight (Thursday, March 26) will be focusing on the car finance issue. In preparation for the programme, Mr Lewis shared a diagram of the topics he’ll be covering. He also included the following message: “So here is my high-quality art as I’m writing my graphics for tonight’s show (9pm ITV) on Car Finance Reclaiming and urgent April deadline you need to beat.
“The real thing to watch out for is what does our demon graphics designer Nik turn this into!”
Regarding the March 30 motor finance redress date, the Money-Saving Expert Website explains: “After it’s launched, firms will have an initial three-month ‘implementation’ period (this could be up to five months for older agreements) to prepare.
“For those who’ve already complained, you’ll be told of any redress you’re owed within three months of the implementation period ending, asked if you want to accept it, then paid. That should happen by the end of 2026.”
What’s it all about?
The scandal relates to certain cars, vans, or motorbikes purchased through Personal Contract Purchase (PCP) or Hire Purchase (HP). It’s alleged that many consumers were mis-sold finance on their vehicles.
According to the FCA, you will be eligible for compensation if your motor finance agreement:
- Included a discretionary commission arrangement (DCA). This makes up about 11.4million agreements
- Had unfairly high commission. This constitutes about 3.2million agrements
- Had a contractual tie – an arrangement between the lender and broker, giving them exclusive rights to provide credit. This makes up about 2.9million agreements.
Only one of these three needs to have been met to be eligible for compensation, although it does need to have happened between April 6, 2007 and November 1, 2024. If your agreement had a DCA that you weren’t properly told about, it’s very likely that you’ll be owed compensation.
What does Martin Lewis say?
Mr Lewis said: “We’re following the easy-redress route, but court is also an option The regulator route is only one option. There’s also the court route, where if you win, you may be awarded more (though 30% or more would likely need to pay claims firms/lawyers’ fees, which could change the maths).
“This is because it’s likely the regulator has compromised somewhat to pre-empt the car finance industry asking for a Judicial Review (if they did, I’d probably push people towards court, which’d cost the industry far more on a case-by-case basis).
“Yet I’ve made the call to focus my and MSE’s resources on supporting you through the easier redress scheme – based on my past experience of major reclaim campaigns, the fact that court scares off many people, and as the huge majority of people contacting me say, ‘can’t they just make it easy and quick?’ – not how to push it to the max. The redress scheme likely means millions more will get redress.”