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.
Fiesta ST engulfed in flames 'within six minutes'
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.
'I could see there had been quite a big failure'
Gill Cronshaw, from Altrincham in Greater Manchester, was driving on a busy motorway when her Ford Focus 1.0-litre EcoBoost suffered a complete engine failure.
"There were no warning lights, there was no indication, the power just, as my foot was on the accelerator, I could just feel there was nothing left," she said.
"It was the most frightening experience of my life because you just feel completely powerless."
The incident happened in March, just three weeks after her car had had a service and MOT.
When the breakdown service reached her, the engine had overheated.
"The pipe had a very clear split, there were coolant stains all inside the bonnet, so I could see there had been quite a big failure, it wasn't wear and tear.
"Car dealer Evans Halshaw confirmed that it needed a new engine at a cost of £5,500, which I was obviously horrified at."
Mrs Cronshaw said Ford offered her a contribution of 55% of the cost of a new engine, but she ended up trading it in at a loss.
Ford's 1.0-litre EcoBoost engine was introduced in 2010 and has been described by the company as a "game-changer".
It has won 10 international awards and Ford has claimed it has set the benchmark for small, fuel-efficient engines.
Louise O'Riordan, from north London, started a Facebook group after her 1.0-litre EcoBoost failed, and it now has more than 3,000 members.
"I needed to support others that are going through the same problems that we had," she said.
"It's got 3,000 members and we have over 1,200 engine failures, 1,000 of those have happened this year.
"We get over 100 [new members] a month at the moment."
'It's not just a car, it's a lifeline to us'
Sam Backhouse, from Grange Moor, Huddersfield, is caring for her husband Mally, who has terminal cancer.
She is currently without a car after her 1.0-litre EcoBoost suffered a complete loss of power.
"It was a lovely drive," she said. Then she received a letter to say it needed a replacement coolant hose.
Before she could have the work done, Mrs Backhouse said her car engine cut out.
"I noticed a light come on and it said 'service now', then the power started to go in the car. It felt sluggish," she said.
While repairs were carried out, the replacement coolant hose was also fitted, and Mrs Backhouse was told her car had a fuse problem which had been fixed.
She said just after she had driven out of the garage, the fault happened again.
She was without a car for more than a month while trying to negotiate with her dealership and finance company.
"People say 'it's just a car, but it's not just a car it's a lifeline to us."
Mrs Backhouse's finance company eventually agreed she could sell it back, although she did lose the hire purchase payments she had made over the previous 18 months.
As a lifelong Ford customer, she feels she has been let down.
"They [Ford] have not based anything in my case on what's going on with us. There is no human element," she said.
Ford has said concerned customers should email them with their vehicle registration number.
You can see the full story on BBC Inside Out Yorkshire and Lincolnshire at 19:30 BST on BBC One on Monday 1 October or via iPlayer afterwards.