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Millions will get a windfall over car finance. Research helps us understand what they’ll do with it

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Millions of motorists across the UK could be in line for payments of around £700 after car dealers mis-sold finance to earn commission. Finance providers stand to lose billions compensating consumers after the scandal.

The UK regulator, the Financial Conduct Authority (FCA), recently announced that lenders must compensate buyers who took out finance for a new or secondhand car. Millions paid more than they should have because of secret fees paid by lenders to dealerships.

For many, this compensation will be a welcome surprise. For others, it will be hard-won compensation after a complicated legal battle. For others still, £700 may not be enough compensation for the time and stress involved – the sum is lower than the FCA had previously estimated – although the total paid out could top £8 billion.

This settlement begs an interesting question. What should recipients do with this money? This is hardly a trivial question. Organisations such as the National Lottery provide financial advice to big winners, recognising that a windfall involves a lot more than popping the champagne corks.

However, financial advice after winning the lottery – pay off debts, buy a........

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