Martin Lewis warns drivers at risk of 'giving away' car finance compensation

Martin Lewis has warned that drivers could miss out on hundreds of pounds in car finance compensation for making a simple mistake. The Money Saving Expert founder suggested motorists tricked into signing up to 'no-win, no-fee' mis-selling claims may owe 30% of any compensation they receive to the claims firms.

However, these claims firms are not in charge of any decision, with the Supreme Court set to rule on the matter later this month. With Martin previously suggesting motorists could be owed over £1,000, drivers could throw away hundreds for absolutely no reason. The warning comes as the major Financial Conduct Authority (FCA) investigation into mis-selling of car finance discretionary commission looks set to reach its conclusion.

Speaking on a video uploaded to social media site X, Martin said: "You really need to be careful with car finance reclaiming adverts right now. You may sign up to one and end up giving away 30% of your money and getting absolutely nothing back in return for it.

"These adverts are everywhere, 'you can be owed thousands' or 'check your number plate and file your car finance claim today'.

"They are generally run by claims management firms or law firms who are trying to get you to sign up for no-win, no-fee deals. Which doesn't sound too bad.

"But right now, you have to understand where we are in the timetable now. There is a major case going through the Supreme Court, that's the top court in the land, about car finance."

Martin stressed that the Supreme Court is expected to hand down its verdict to car finance firms at some point over July.

It means that firms will be forced to contact drivers who are affected, with individuals having to do nothing to secure their compensation.

Martin remarked: "Now if they are going to do that, if you signed up to a 'no-win, no-fee' firm, you would still have to give it potentially over 30% of your money, even if it has not done anything. This isn't just me saying this, this is what the regulator has said."

The FCA explained: "Consumers should be aware that by signing up now with a CMC or law firm, they may end up paying for a service they do not need and losing up to 30% of any money they may receive."

However, Martin added: "Remember the big picture. The big message I'm trying to give you right now is the court may end up ruling that you have already been ripped off once.

"Don't rip yourself off again by pointlessly signing up to a 'no-win, no-fee' firm in the couple of weeks run-up before we hear what the Supreme Court is going to say."