Volkswagen Financial Services (UK) has also agreed to pay more than £21.5 million, shared among around 110,000 customers after the Financial Conduct Authority (FCA) showed it had been “failing to treat its customers in financial difficulty fairly”.

The FCA said that between 2017 and the middle of 2023 Volkswagen Finance had failed to take into account the individual circumstances of customers or to provide support tailored to their needs.

“This meant that, in some cases, Volkswagen Finance took cars away from vulnerable customers without considering other options.

“This risked people being put in a worse position, particularly if they relied on their car to travel to work,” the FCA said in a statement.

Volkswagen Financial Services today acknowledged failings had been made and apologised to those affected.

“We recognise our shortcomings in these past cases and have made significant adjustments over recent years to ensure that we are always delivering the right level of service,” it said in a separate statement.

“We are in the process of concluding our remediation efforts as we continue to provide goodwill payments to affected customers and apologise for any detriment caused,” it added.