BMW Faces £612m Provision from UK Car Finance Mis-Selling Scandal
BMW Financial Services (GB) has increased its provision for mis-selling claims in the UK to £612 million, up sharply from £206 million in 2024. This is part of a broader motor finance scandal affecting multiple lenders and covering over 12.1 million historic car loan deals. The Financial Conduct Authority (FCA) launched a redress scheme offering average compensation of around £830 per affected customer, but the program faces legal challenges from several major players including Mercedes-Benz, Volkswagen, and Crédit Agricole. BMW warned that final costs could differ significantly due to ongoing litigation. The company also set aside an additional £25.5 million for claims outside the FCA's scope. BMW Financial Services (GB) reported a pre-tax loss of £139 million in 2025, compared to a profit of £39 million in 2024. Legal challenges are delaying payouts until at least 2027 and could potentially lead to parts or all of the compensation scheme being invalidated.
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Topics: BMW Financial Services car finance mis-selling FCA redress scheme legal challenges