Millions of drivers who were mis-sold a car loan will discover how they will be compensated, as the finance watchdog unveils its final plans for an industry-wide scheme. The Financial Conduct Authority (FCA) will publish the final decisions on the long-awaited programme on Monday afternoon.

The regulator outlined draft plans last year, but it is likely to make several changes after receiving more than 1,000 responses to its consultation. Under the latest proposals, the scheme will cover car finance agreements taken out between April 6, 2007, and November 1, 2024.

The FCA estimated that around 14 million deals, or 44 per cent of all those made since 2007, were unfair and therefore eligible for compensation. Consumers were estimated to be compensated an average of £700 per agreement, but this amount will vary depending on individual cases.

This was expected to come at a total cost of £11 billion to the industry, including the total payouts and the operational costs of running the scheme.

Craig Tebbutt, a financial health expert for Equifax UK, said: “It has previously been estimated that average compensation levels could be in the region of £700 per agreement, but the final details around the scale, scope and timelines are expected to be confirmed on Monday. However, there is nothing to stop consumers checking their paperwork now and getting their details ready in the meantime.”

He stated that research conducted by the credit reporting firm revealed that “many consumers don’t know how to check their eligibility and expect the process to be a hassle, with old or missing paperwork being a real barrier”.

Equifax has introduced a car finance checker within its latest app, enabling users to view a list of their previous agreements and duplicate the information, with drivers urged to submit a complaint to their lender using a template available on the FCA’s website if they believe they qualify for compensation.

Lenders and car finance providers have been contesting the FCA’s recommendations, with some expressing concerns that the anticipated compensation amounts are excessive and fail to accurately represent customers’ actual losses.

Conversely, certain consumer groups and MPs have contended that numerous motorists will receive inadequate compensation under the existing proposals.

The FCA has already confirmed several modifications it is implementing to the procedure since the recommendations were published last year. This includes providing lenders with additional time to reach motor finance customers from when the scheme officially commences.

However, it is also seeking to simplify the process by permitting those entitled to redress to accept it straightaway without awaiting a final determination.

It believes that this means millions of people would receive compensation in 2026.