Ford has offered to refund thousands of pounds to customers whose engines have failed, following a BBC investigation.
Hundreds of customers have said their cars with Ford EcoBoost engines have overheated, causing engine failure.
Others have reported their cars with 1.6-litre EcoBoost engines have burst into flames while they were driving.
Many 1.0-litre drivers had been told they had to pay for repairs, but Ford has now said it will cover the cost and refund customers who have already paid.
The car giant said in a statement safety was its number one priority.
“Ford has already made substantial contributions towards the cost of 1.0-litre repairs, but ongoing discussions with customers show that Ford needs to go further to ensure reasonable repair costs are covered,” it said.
“With any future cases, subject to being assessed and linked to potential 1.0-litre engine overheating, we will contribute 100% of the cost of repair at a Ford dealer.
“Furthermore, we will re-examine previous cases to ensure that this policy of a 100% contribution to the repair cost is applied consistently.”
Ford said it had reworked 96% of affected cars.
George Roberts, of Brandon, Suffolk, was driving his Fiesta ST 1.6-litre on a dual carriageway late at night when he realised his car was on fire.
He noticed an orange glow at the side of the vehicle, pulled over to the side of the road and saw the flames.
“From the whole engine being on fire to the whole car, took about six minutes,” he said.
Mr Roberts said he was offered an insurance payout on his car, which he accepted despite it being less than it would have cost to replace his car with a similar model.
He said: “I’ve lost a lot of money through Ford, they don’t seem massively bothered by it.”
As for the issues with the 1.6-litre engines, Ford said it had issued a voluntary safety recall through the Driver and Vehicle Standards Agency (DVSA) in January on certain vehicles including the Focus, Kuga, C-MAX, Fiesta ST and Transit Connect models built between 2010 and 2015.
It said it was contacting customers affected by the overheating problem to arrange for a coolant sensor to be fitted.
The fault can cause the engine’s cylinder head to crack, which in extreme circumstances could lead to a fire.
Ford has been aware of the issue on the 1.6-litre EcoBoost since 2012, after several engine fires in the United States. A recall was issued in the US in 2014.