MARTIN Lewis has warned motorists who purchased their vehicles between 2007 and 2021 that they could be owed “billions” in compensation.
Britain’s trusted money expert dropped the bombshell announcement on his podcast earlier this month.
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He revealed drivers might be able to make this claim as a result of a Financial Conduct Authority (FCA) investigation.
He claimed “millions” who bought a car under a PCP or finance agreement could be affected.
He also said car finance payouts could be on PPI levels once the FCA has finished their probe.
The watchdog has since revealed deals agreed between 2007 and 2021 will be looked into.
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This has caused financial experts to increase the total cost of the bill with lenders likely to be forced to pay much more.
According to the Financial Times, analysts at Jefferies feel total costs for the industry could reach around £13billion.
This is more than prior estimates which put total payouts nearer £4billion.
Martin Lewis has promised to update followers with more information “in 10 days” as he works on finding the most accurate information.
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He revealed the scale of the programme last week as he admitted a “back of the envelope” calculation would see tens of billions of pounds given back to motorists.
Explaining the situation, he told the BBC: “What was happening at that point is the lenders who organised the finance were saying to the car dealers ‘the commission is discretionary’.
“In other words, if you want more commission on these finance products – which is why they were being more heavily sold – you can simply increase the cost of the finance and you will get more commission.
“Many of them did so and it wasn’t declared so the consumer was not aware quite what enormous sums were being paid in commission to car dealers for this type of finance.”
The FCA decided to look into the problems after a “high number of complaints” were made to motor finance companies around compensation for commission arrangements.
Firms have rejected most of the complaints because they feel they have not acted unfairly or caused loss for their customers.
However, the Financial Ombudsman Service found in favour of motorists in two recent cases which the FCA feels is likely to lead to a “significant increase” in further complaints.
This isn’t the only great advice Martin Lewis has shared recently.
Earlier today we told how he warned thousands they could be owed up to £40,000 – don’t miss out on the “rock hard deadline” in just days.
The Money Saving Expert issued the urgent message during an episode of The Martin Lewis Money Show Live.
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He reminded Brits of the imminent deadline to claim up to £40,000 in backdated bereavement support by February 8.
He said: “This is really important money for some people in vulnerable positions. This is urgent.”
