Volkswagen faces major UK mis-selling compensation costs

Volkswagen Financial Services (VWFS) is expected to disclose financial accounts this week that reveal the significant impact of a motor vehicle finance compensation program in the United Kingdom.

The compensation program, established by the Financial Conduct Authority (FCA), addresses claims from motorists who were victims of mis-sold financial products over several years. While the total scale of the FCA-led program is estimated at £9 billion, the specific impact on Volkswagen is expected to reach hundreds of millions of pounds.

Analysts suggest that, based on provisions made by competitors such as BMW and Mercedes-Benz, Volkswagen may need to set aside at least £500 million for the 2025 financial year. Previous estimates had suggested the total cost to the company could reach approximately £1.5 billion. A spokesperson for VWFS stated that the company has taken a ‘thorough and responsible approach’ to making these provisions and expects the annual financial statements to be published at Companies House shortly.