Martin Lewis urges anyone who bought a car from 2007-2024 to act now - 'Owed hundreds'

Martin Lewis has urged anyone who bought a car, motorbike or campervan on finance between April 2007 and November last year to "act now". His plea came after the Financial Conduct Authority (FCA) said its proposed compensation scheme would see payouts on about 14 million unfair motor finance deals.

Payouts could start next year at an average of about £700 each, according to the financial watchdog's proposal. The FCA has estimated its redress scheme could cost lenders £8.2billion in compensation, based on about 85% of eligible consumers taking part.

The figure rises to £9.7bn if all eligible consumers are compensated, which the watchdog said was very unlikely.

Lewis told listeners of The Martin Lewis Podcast that to date only four million people have complained so far, meaning "roughly" 10 million more still need to.

He added: "If you've complained already that means when it comes to the scheme they're going to get in touch with you, tell you you're going to be paid out and you'll be paid out without doing anything."

But the founder of Money Saving Expert warned that those who haven't complained will have to rely on the authorities finding details of their case, current address and work out whether they were missold.

The finance whizz said it would take longer and require opting in. He added: "You would be far better to be in the group who are going to be contacted and don't need to do anything.

"So I would urge anyone who's had motor vehicle finance in the right dates to have a look at your paperwork now... £8.2bn is being paid out. You don't want to miss out on a technicality."

Buyers could have had more than one car loan which is eligible for compensation.

The FCA said motor finance firms broke the law or its rules by not properly informing customers about commission paid by lenders to the car dealers that sold them the loan.

This meant that many motorists did not have the opportunity to negotiate or find a better deal and therefore may have paid a higher interest rate for their loan.

Most of the car finance deals covered by the scheme involve so-called discretionary commission arrangements (DCAs).

This refers to arrangements whereby brokers, including car dealers, were able to increase interest rates on car loans so they could get more commission.

The FCA advises any consumer who thinks they may be eligible for compensation to contact their lender or broker if they haven't already done so.

Lenders will have three months from the date of the scheme's launch, set to be early next year, to contact those customers who have already complained - and six months to reach out to those who have not.

The FCA said its scheme is focused on about 30 lenders who make up around 89% of the motor finance market.

The watchdog has repeatedly warned consumers that they do not need to use a claims management company or a law firm to access its compensation scheme. It warned they could be subject to unnecessary fees if they do.