Martin Lewis has revealed the motorists who are likely to be eligible to make a claim about unfair car finance, as the Financial Conduct Authority (FCA) has extended the complaint window to May 2025.
Talking in his ITV live show on Tuesday, the British money saving expert delved into the mis-selling ‘scandal’ after judges judges ruled ‘secret’ commission payments to dealers are unlawful.
The finding forced firms to suspend new borrowing deals amid fears buyers, possibly more than seven million, have not given ‘informed consent’ to car dealers being rewarded for securing loans.
On tonight’s episode, the 52-year-old outlined seven steps that make motorists covered by the regulator’s pause, meaning they are likely to be eligible to complain, which could result in a payout worth thousands of pounds.
‘So what I’m doing is looking at the regulator’s rules… because that effectively means they think they’re the ones who have a complaint,’ the money-saving expert said.
The criteria include those who took out motor vehicle finance on cars, vans, motorbikes, and camper vans.
Next, Martin explained that the drivers had to have taken out finance from April 2007 to roughly October 2024.
The money expert explained the finance types eligible to complain, including Personal Contract Purchases (PCP) and Hire Purchase.
Money saving expert Martin Lewis (pictured) revealed which motorists may be owed thousands back from a car finance scandal
Talking on his live ITV show, Martin explained the people likely to be covered by the regulator’s pause
Martin added that Personal Contract Hire, typically known as leases, might be included.
‘We’ll find out if the people who had leasing deals could be included in that complaint, we don’t know now,’ Martin said.
He added that the complaint still applies to vehicle owners who are now dead, with beneficiaries and executors able to complete the application.
Finally, Martin added that if a person has had multiple eligible car finance deals, it might mean more than one payout.
Initially, the FCA said it would report on its investigation findings in September, but they have since extended the date to May 2025. The regulatory board set December next year for when firms must have handled complaints.
Before being banned in January 2021, some lenders allowed brokers to adjust the interest rates they offered customers for a loan, which could mean they received more cash in commission.
The research found that the selling practice – a discretionary commission arrangement – led to higher finance costs and was unfair to consumers.
In March, Black Horse was the most complained-about lender via MoneySavingExpert’s car finance tool, with about 16 per cent of the total number.
The 52-year-old explained that having multiple eligible car finance deals might equate to multiple payouts
Owned by Lloyds Banking Group, the dealer offer loans on cars including Jaguar, Land Rover and Suzuki.
In May, Lloyds said it was setting aside about £450million to cover potential costs and compensation relating to claims.
Volkswagen Financial Services is the second most complained-about lender, followed by Stellantis Financial Services and Santander, according to the consumer platform.
In March, Martin said: ‘The numbers of complaints in not much more than a month is staggering – off the charts – far more than I expected.
‘So, it’s not surprising that some firms are struggling to respond to complaints in a decent time.
‘To frustrated complainers, I’d say for now we should be prepared to give companies some wriggle room on timings, but firms need to urgently step up their complaint-handling resources.’
The money expert said the number of complaints about car finance suggest it could be a bigger problem than the PPI mis-selling scandal which rocked UK lenders in previous years, based on the number of complaints.
He said the issue ‘feels like it is building up even more quickly’ than the scandal which saw banks and companies paying out millions in compensation.
Lloyds had to pay billions of pounds to compensate customers who were mis-sold payment protection insurance from the mid-1990s.
‘In value terms, car finance mis-selling is potentially going to be the second biggest reclaim payout in UK history – possibly over £10billion repaid – which could even provide a fillip to the economy as PPI did,’ Mr Lewis said.
Meanwhile, the Financial Conduct Authority (FCA) said it wants to make sure customers are given compensation in an orderly and efficient way, if it finds they have lost out due to widespread misconduct.
The MoneySavingExpert.com tool helps people build an email and submit it to their car finance provider, if they think they are likely to be affected.
Mr Lewis said if people think they could be eligible then they should consider logging a complaint ‘sooner than later’.