Payouts of £700 per driver under compensation plans

Millions of car finance victims could receive less compensation under the regulator’s plans than previously anticipated.

The Financial Conduct Authority (FCA) said the payments could come from 14 million motor finance deals between April 2007 and November 2004.

The regulator previously recommended drivers could get less than £950 per deal, but now says the average will be around £700. Lenders could pay out £8.2bn in compensation.

Payments are commission arrangements between lenders and dealers, unfair contracts, and false information given to car buyers.