Millions of UK drivers could get payouts after a watchdog investigated inflated car loan rates in a mis-selling scandal.

The Financial Conduct Authority (FCA) revelation has been deemed "the new PPI" by Martin Lewis.

Founder of Money Saving Expert and all-round financial guru, Lewis described it as a scandal in which consumers may have been unfairly charged inflated prices for car loans.

The Financial Conduct Authority said on Thursday (January 12) that it had decided to examine whether a compensation scheme was needed to deal with the alleged large-scale mis-selling.

Lewis' projections indicate that "at the top end" this might result in PPI-scale settlements, which have reached £40 billion, or be significant enough to qualify as quantitative easing.

He said: "My suspicion is when it [the FCA] finishes its investigation it will set up either A) a redress scheme where it orders all the firms to pay redress to every affected customer even if they’ve not complained; or B) redress rules where it orders them to pay out redress based on a set formula, to those that complain.

This might result in PPI-scale settlements which have reached £40 billion

"The payout would be either the interest on loans (which is big), the commission (which is big), or the whole loan (which is huge)."

Lewis clarified that any complaints filed after this point will not be addressed because the FCA has placed a stop on companies that handle grievances about auto financing.

He does, however, advise anyone who believes they were misled about auto financing to file a complaint right away, "as a marker".

If you think you may have been mis-sold car finance, visit the official site for details and how to claim.