The financial regulator has provided an update for numerous drivers awaiting further information on a significant car finance compensation plan. The Financial Conduct Authority (FCA) is presently seeking feedback on the specifics of a compensation initiative for individuals who were unfairly sold a car finance agreement between 2007 and 2024 due to inadequate disclosure of broker commissions.

Drivers could be entitled to compensation if they had a car finance deal involving a discretionary commission arrangement (DCAs), where brokers and car dealers could raise interest rates on car loans to earn more commissions. Other eligible car finance agreements may include those with high commission structures or cases where a broker failed to disclose an exclusive lender partnership.

In a recent announcement, the FCA has mandated that motor finance firms address complaints two months earlier than initially scheduled. The deadline, previously set for July 31, 2026, has been moved up to May 31, 2026. Complaint handling was paused in January 2024, but firms are expected to investigate and start providing final responses to motor leasing complaints from December 5, 2025, following standard complaint resolution protocols.

Over 14 million car finance agreements could fall under the compensation plan, projected to launch in early 2023. The FCA had previously estimated an average compensation of around £700 per driver. The FCA emphasized the need for prompt complaint resolution, highlighting that complaints cannot be indefinitely delayed.

The FCA advised against using legal or claims management services to file complaints, encouraging individuals to contact the car finance lender directly for a free self-submission. Those who have already lodged complaints before the scheme is operational are likely to receive compensation sooner. Lenders are estimated to pay out approximately £8.2 billion in compensations.

Financial expert Martin Lewis has urged potentially eligible individuals to file complaints promptly. Lewis suggested submitting a complaint even for older cases where details may have been deleted, as it serves as a marker for review. He emphasized the importance of assessing eligibility for compensation early on to avoid missing out on potential claims.