Millions could be set for car finance compensation payouts (Image: Getty)
Millions of motorists could receive hefty compensation payouts due to a analysis of car finance commission agreements.
It is believed that millions of buyers could receive hundreds of pounds in payouts with firms likely to splash out around £30 billion.
Banks have been forced to set aside hundreds of millions of pounds with finance guru previously describing it as the new PPI.
It comes after a recent Court of Appeal ruling went in favour of three motorists who had without realising.
Some drivers had reported paying a staggering 25% commission added onto finance deals with little knowledge of the extra fees.
The FCA is investigating car finance commission payouts (Image: Getty)
The Court of Appeal concluded that motorists had to give “fully informed consent” to a policy before fees could be issued.
This alone with many more road users likely to feel aggrieved.
Analysis has suggested that as many as 80% or 90% of cars are bought on finance, around two million per year.
Martin stressed that the recent ruling means “more than double the number” .
He previously explained: “I’ve had it confirmed this applies to ALL car finance commission complaints, not just the Discretionary Commission Arrangements (DCAs) complaints previously covered.
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“What this means: It signals that the FCA is paving the ground to in future broaden the scope of its car finance investigation, so not only at the 40% of past claims that had DCAs (where dealers could increase their commission by increasing interest) but all commissions including fixed commissions.
“This is on the back of the Court of Appeal ruled ‘consumers need to know all material facts including the amount of commission’ which they often weren’t told even in fixed commission cases.
“It looks like (I need to dig) if the hold is extended, almost everyone who has had car finance deals may have a complaint.”
It is believed motorists who purchased – when discretionary commission charges were banned – are affected.
Motorists have been urged to get in their complaint letters as soon as possible with the FCA extending time for dealers to respond.
No information on what type of compensation or redress scheme has been confirmed but the Court of Appeal ruling saw some motorists receive over £3,000.
The FCA explained: “Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment.
“Any complaint extension would allow them time to consider how these might be efficiently and effectively handled.
“This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market.”