The UK motor finance arm of Stellantis, the carmaker behind Vauxhall, Fiat and Jeep, has set aside £221.3m to cover compensation linked to the mis-selling of car loans, pushing the business to a £69.3m pre-tax loss for 2025.
Accounts filed at Companies House show the Surrey-based subsidiary’s provision for the industry-wide motor finance affair stood at £221.3m at the end of 2025, up from £37.1m at the start of the year. The business made a pre-tax profit of £69.4m in 2024.
The company, a joint venture with the French bank BNP Paribas, said in the accounts that “significant uncertainty remains regarding the ultimate cost” of the affair, adding that “actual outcomes may differ materially from the amount provided”.
The finance arm’s earlier £37m provision was disclosed in its 2024 accounts. Stellantis declined to comment.
The accounts have emerged as a preliminary hearing begins today in a legal challenge to the compensation scheme that the Financial Conduct Authority (FCA) is seeking to impose on the industry. Three lenders and a consumer group have taken the regulator to court over its plans.
The UK motor finance arms of Mercedes-Benz, Volkswagen and the French bank Credit Agricole are contesting the scheme. So is Consumer Voice, which argues that the FCA’s plan shortchanges motorists.
The case centres on commissions that lenders paid to car dealers for selling finance on vehicle purchases, under arrangements that were not properly disclosed to buyers. An FCA investigation concluded last year that there was widespread unfairness.
The regulator estimates that 12.1 million motor finance deals agreed between 2007 and 2024 will be eligible for redress under its final scheme. It expects lenders to pay about £7.5bn in compensation and a further £1.6bn in administrative costs.
In an update published on 1 May, the FCA said of the scheme: “We will defend it robustly as lawful and the best way to resolve such a widespread, long-running and complex issue.” On 2 July it said the Upper Tribunal had suspended parts of the scheme on terms agreed with the four challengers, and that firms must comply with all rules that are not suspended.
The FCA has estimated that the industry’s bill could rise by more than £6bn if the legal challenges force it to abandon its plan, leaving car loan providers to deal with compensation demands on their own.
Other lenders have also made provisions. Lloyds Banking Group has set aside almost £2bn and Barclays has earmarked £430m, while the UK financing arms of BMW and Ford have booked provisions of £612m and £155m respectively.
Mercedes-Benz Financial Services UK, one of the lenders challenging the scheme, reported a £364.6m loss for 2024 after its total provision reached £423.8m, according to accounts reported by Business Matters in January.
The mis-selling affair is expected to cost carmakers and banks billions of pounds overall. It is set to be the largest consumer finance scandal since payment protection insurance, for which the bill reached £50bn.
Stellantis, which is based in the Netherlands, was created five years ago through the €50bn merger of Fiat Chrysler and PSA, the owner of Peugeot.
