Millions of individuals in the UK may be entitled to a higher compensation amount of £830 following a significant development in the car finance mis-selling controversy. Despite this revised sum, legal entity HD Law has raised doubts about whether affected drivers are receiving their rightful compensation as payouts draw near.
Based on HD Law’s history, drivers could potentially secure more than double the £830 suggested by the Financial Conduct Authority (FCA). The announcement made late last night revealed that compensation is anticipated to be distributed for over 12 million car finance agreements that were mis-sold between 2007 and 2024.
While the FCA mentioned a lower number of affected individuals compared to the initial estimation, the average payout per agreement has risen to approximately £830. The FCA foresees that 75% of eligible consumers will file claims, resulting in a total redress of £7.5 billion.
Previously, the FCA had projected an average payout of around £700 for participants in the scheme, with a potential total cost exceeding £8 billion. However, the updated £830 figure does not reflect the potential individual entitlements if claimants opt for legal recourse.
If you made a PCP or Hire Purchase transaction for a car, van, or motorcycle between 2007 and 2024, you might be among the millions owed compensation. Approximately 14 million agreements were mis-sold, and as per the proposed scheme by the FCA, those who acquired motor vehicle finance within specified dates could be eligible for compensation.
HD Law aims to secure a full refund of the commission paid, and through a judicial review of the entire lending agreement, payouts could be substantially larger. Hence, customers of HD Law presently receive an average of £1,846.23 per financed vehicle, as per the firm’s Trustpilot rating of 4.7.
Kevin Durkin, Director of HD Law, criticized the FCA’s approach, expressing concerns about the capped liability for banks and potential loss of compensation for consumers. Individuals who believe they were subjected to car finance mis-selling may consider the FCA’s forthcoming redress scheme in 2026, although utilizing this scheme will not be mandatory.
For those inclined towards legal action, the option to pursue claims through the courts remains available. Lenders will have a designated period to notify complainants about owed compensation and further steps to be taken. The victims of discretionary commission arrangements, which led to higher interest rates for customers, are eligible for compensation. These arrangements were banned by the FCA in 2021.
The average claim value per agreement through HD Law’s partner law firm as of July 31, 2025, stands at £1,846.23.