Stellantis’ British motor finance subsidiary has reported a sharp swing to a pre-tax loss as provisions for a widespread car loan mis-selling scandal more than quintupled, reaching over £220 million. The Surrey-based arm of the global automotive group behind brands such as Vauxhall, Fiat, and Jeep increased its fund to £221.3 million by the end of 2025, up from £37.1 million at the start of the year, according to recently filed accounts. This increase contributed to the company posting a £69.3 million pre-tax loss for the year, a marked decline from the £69.4 million profit recorded in 2024.

The escalation in provisions is tied to the fallout from one of the largest consumer finance scandals in recent years involving mis-sold motor finance agreements across the UK automotive sector. The Financial Conduct Authority (FCA) has been pursuing a compensation scheme targeting lenders that failed to properly disclose commission arrangements paid to car dealers for finance deals. An FCA investigation concluded in 2025 found widespread unfairness across some 12.1 million motor finance contracts made between 2007 and 2024.

The authority has estimated the industry-wide cost of redress at approximately £7.5 billion in compensation payments, with an additional £1.6 billion expected administrative expenses. The FCA's scheme aims to provide a structured approach to compensation, but it has faced legal challenges. Several major financing providers, including the British motor finance arms of Mercedes-Benz, Volkswagen, and Credit Agricole, are contesting the plan in court. A consumer advocacy group, Consumer Voice, has also opposed the scheme, arguing that it inadequately compensates affected motorists. A preliminary hearing on these legal disputes began on October 5.

Industry estimates suggest that if the FCA’s compensation framework is overturned, the total cost to lenders could increase by more than £6 billion due to uncoordinated compensation efforts. Larger financial institutions have already set aside substantial sums in anticipation of the fallout: Lloyds Banking Group has allocated nearly £2 billion, Barclays £430 million, and the UK financing arms of BMW and Ford provisions of £612 million and £155 million, respectively.

Stellantis, headquartered in the Netherlands and formed from the 2021 €50 billion merger between Fiat Chrysler and PSA Group, operates its UK motor finance business as a joint venture with BNP Paribas. The company acknowledged in its filings that significant uncertainty remains over the ultimate financial impact of the mis-selling scandal, noting that actual costs could vary materially. Stellantis declined to comment further on the situation.