“Lenders had already breathed a sigh of relief about the scale of the compensation they would have to dish up to motorists and today’s update from the FCA brings the bar even lower,” says Danni Hewson, AJ Bell head of financial analysis.
“But 14 million car buyers do stand to receive a significant amount of compensation after the regulator said motor finance firms broke rules and didn’t properly inform motorists of the commission that was being paid out to dealers.
“For those who have previously taken out loans it will require a shuffle through old paperwork to put in a complaint to lenders or brokers, while those who have already complained won’t need to do so.
“This decision brings to an end a rather ugly chapter in car finance lending and consumers are warned that they could lose significant portions of any compensation due if they use third parties to make a claim.
“Whilst this scandal doesn’t come close to that surrounding PPI it does leave a bad taste with many motorists.
“Buying a car is often an intimidating process and one that sometimes comes with the pressure of making a quick decision in order to grab hold of the deal on the table.
“For many people it’s a matter of whether they can afford the car they want at the price that works for their budget and the complicated extras make decisions harder.
“But car finance is also the only way many people can afford the vehicles that get their kids to school, get them to work and makes life possible.”
