Car finance mis-selling payout scheme could be worth billions

A compensation scheme for drivers over the mis-selling of car loans could cost as much as £18bn, the financial regulator has said.

The Supreme Court ruled on Friday that hidden commissions from lenders to dealers on car loans were not unlawful, meaning millions of motorists will not be able to claim.

However, the judgement left open the possibility of compensation claims for particularly large commissions which the Supreme Court said were unfair.

Following the ruling, the Financial Conduct Authority (FCA) has said it will run a payout scheme – estimated to cost between £9bn and £18bn.