Drivers are being urged not to delay tracking down old car finance agreements despite the temporary pause to the Financial Conduct Authority's (FCA) compensation scheme.
Credit reference agency Equifax said motorists should use the extra time to locate details of historic finance agreements, rather than waiting for the redress process to resume.
Legal challenges delay compensation scheme
The FCA recently paused its proposed industry-wide compensation scheme following legal challenges, with court hearings expected later this year or early next year. The delay has left many motorists waiting to find out when claims can begin, but Equifax believes drivers can still prepare by gathering key information about previous finance agreements.
Drivers who took out finance to buy a car, van or motorcycle between 2007 and 2021 may have been affected by the commission arrangements at the centre of the ongoing investigation.
The FCA has previously estimated that millions of agreements could potentially fall within the scope of a compensation scheme, although eligibility will ultimately depend on the outcome of the legal process and the final design of any redress scheme.
Equifax reports over 721,000 agreements accessed
According to Equifax, more than 721,000 historic car finance agreements have already been successfully accessed by consumers through its myEquifax app as motorists check whether they could be affected.
The company said as many as 12 million historic car finance agreements could ultimately fall within the scope of any future compensation scheme, with estimated payouts averaging £829 per agreement.
Craig Tebbutt, financial health expert at Equifax UK, said: "Despite the latest pause with the car finance redress scheme, this is still a great opportunity to embrace financial wellbeing and get to grips with your credit agreements."
"Car finance is a staple of UK household budgets, and we want to help consumers overcome the hurdle of old and missing paperwork. Our free car finance checker tool has been streamlining this with nearly three-quarters of a million agreements already tracked down. With as many as 12 million additional loans potentially in scope, accessing these old agreements now is the best way to get ready."
How to prepare for potential compensation
Motorists who believe they could be affected are being encouraged to locate details such as agreement reference numbers, finance provider names, dates and the amount borrowed while they wait for further updates on the compensation process.
Those who no longer have their original paperwork may still be able to trace historic agreements through their credit records or by contacting their finance provider directly. Keeping copies of any correspondence relating to previous vehicle finance could also prove useful if a compensation scheme is introduced.
Equifax said previous research found that many people put off dealing with financial administration, with a quarter admitting they avoid it because they do not want to face reality, while others said they simply lacked the time or found the process inconvenient.
Although the compensation scheme remains on hold, the company said using this period to gather information could help motorists act more quickly if the FCA's redress scheme goes ahead following the outcome of the legal challenges.
