Three things drivers should do as a major car manufacturer sets aside £200m for loan scandal payout claims
BMW has set aside £200m for loan scandal payment claims - here’s three things all drivers should know as millions of motorists could soon pocket refunds 💷
A major carmaker’s finance arm has set aside over £200m for car loan mis-selling claims
Millions of motorists with finance deals from 2007–2020 could be due compensation
Dealers often failed to disclose commission, leading to unfairly high interest rates
The FCA is designing an industry-wide redress scheme, with payouts expected in 2026
Drivers don’t need to act yet, but keeping old finance paperwork could help with claims
The finance arm of a major car manufacturer has quietly put aside more than £200 million to cover the fallout from the ongoing car loan mis-selling scandal.
BMW drivers who used finance deals between 2007 and 2020 may soon be able to claim their share.
The scandal centres on how car finance was sold. For years, many dealers and finance firms failed to properly disclose that they were paid commission for arranging loans.
That meant customers were often pushed towards deals with higher interest rates than they might otherwise have been offered, leaving them out of pocket, sometimes by thousands of pounds.
The Financial Conduct Authority (FCA), which regulates the industry, believes the practice may have breached its rules and potentially the law.
It is currently consulting on an industry-wide redress scheme, which would see compensation paid out to affected drivers. The regulator hopes payouts will begin in 2026.
How much could BMW drivers get?
Millions of motorists driving all sorts of car brands and models are expected to be eligible, covering agreements signed over a 13-year period.
While the exact compensation will depend on the size of each loan and how unfair the deal was, the FCA has indicated this could be one of the largest consumer redress schemes since PPI.
BMW’s latest accounts, filed with Companies House, show its finance arm has set aside £206.9 million by the end of 2024, nearly triple what it had allowed for the previous year.
This pot is earmarked to cover not only compensation but also admin and legal costs. The company admitted it has already received a “number of complaints” over historic commissions, some of which are being reviewed by the Financial Ombudsman Service.
Three things all drivers should do?
For now, customers don’t need to make a formal claim. The FCA is working on the framework of the scheme and is expected to publish detailed guidance later this year.
But if you took out a BMW finance deal (or one from another major brand) between 2007 and 2020, it’s worth:
Digging out old finance paperwork: contracts, monthly statements or emails.
Keeping an eye on FCA updates: announcements will be widely covered in the press.
Considering an early complaint: some drivers have already lodged claims with their lender or the Ombudsman, though the regulator’s scheme will ultimately set the rules for payouts.
BMW has stressed that the final compensation bill could be “materially less than or greater” than the £200m it has reserved. But for millions of drivers, the chance of a refund is looking more real by the day.
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