UK regulator says car finance scandal nets banks £8.2bn.

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The UK car finance scandal will cost banks £8.2 billion, the financial regulator has said, a lower-than-expected figure that is still on track to become one of the biggest compensation schemes in the industry.

the Financial Conduct Authority It was previously estimated that the total cost of compensation could range between £9 billion to £18 billion. He said last month that most people would likely get less than £950 per deal.

The scandal stems from commissions that lenders have paid to dealerships for cars as part of millions of vehicle sales for many years, which the regulator and courts have said incentivized higher interest rates and were not adequately disclosed to consumers.

Lloyds Banking Group is the UK’s largest car finance provider through its dark horse trading business and has secured a £1.2 billion judgment to cover the cost of the redress scheme.

But the lender with the highest exposure to scandal is Close Brothers, the 146-year-old City of London Bank, which has a fifth-largest loan book in car finance.

This is a developing story