Millions of motorists are in line for compensation payments, the financial watchdog has said.
Around 14 million drivers will get payouts at an average of £700 as part of a redress scheme, the Financial Conduct Authority said.
Customers at motor finance companies overpaid or missed better deals because important information was not disclosed, according to the watchdog.
The firms now face paying £8.2 billion in compensation.
Payments will start from next year. It comes after the FCA announced the redress scheme in August.
The scheme covers motor finance agreements in which commission was paid from the lender to the broker taken out between April 2007 and last November.
More than 14 million such agreements made in that period have been deemed to be unfair.
The announcement follows the Supreme Court overturning a ruling which accused firms of not disclosing “secret” commission payments to borrowers.
Although this avoided the companies paying out millions, the FCA has said compensation is still owed because of “discretionary commissions arrangements” in contracts.
Some motorists may be entitled to more than one compensation payment if they took out several agreements.
The FCA’s chief executive, Nikhil Rathi, said: “Many motor finance lenders did not comply with the law or the rules.
“Now we have legal clarity, it’s time their customers get fair compensation. Our scheme aims to be simple for people to use and lenders to implement.”
