If your car finance agreement started before 1 April 2014, you have until 31 August 2026 to complain under the FCA’s motor finance redress scheme — less than two weeks from today. The scheme covers around 12.1 million agreements taken out between 6 April 2007 and 1 November 2024, with average redress of roughly £830 per agreement and £7.5 billion set aside on the FCA’s assumption that three in four eligible consumers claim. Complaining is free and takes minutes. No scheme payments are being made yet: parts of the scheme were suspended on 2 July 2026 after four legal challenges, and payments are not expected before 2027.
This guide covers who qualifies, what each date means, how a payout is calculated, why the money is on hold and what to do this week — including why most people do not need a claims management company, and what one costs if you use one.
How the scheme came about
For years, car dealers acting as credit brokers could set the interest rate on your finance and earn more commission the higher they set it. These discretionary commission arrangements were banned by the FCA from 28 January 2021 under PS20/8. Older agreements were not unwound, which is where the compensation question starts.
The Supreme Court settled the law on 1 August 2025 in Hopcraft, Johnson and Wrench ([2025] UKSC 33). It ruled that car dealers do not normally owe customers a fiduciary duty, which knocked out the broadest claims. But in Mr Johnson’s case it found the relationship unfair under section 140A of the Consumer Credit Act 1974: the lender paid commission worth 25 per cent of the amount advanced and 55 per cent of the total charge for credit, while the paperwork implied the dealer was shopping a panel of lenders. He got the commission back, with interest.
The FCA then consulted in October 2025 on a scheme covering 14 million agreements at about £700 each. The final rules, confirmed on 30 March 2026, narrowed the population to 12.1 million agreements but raised the average to about £830. If you have seen the older £700 figure quoted, it has been superseded.
The dates that matter
There is no single deadline, which is why the coverage is confusing. Your date depends on when the agreement started; your lender’s reply date depends on when you complain.
| Your agreement started | Complain by | Lender must respond by |
|---|---|---|
| 1 April 2014 to 1 November 2024 | 30 June 2026 (passed) | 18 November 2026 |
| 6 April 2007 to 31 March 2014 | 31 August 2026 | 18 January 2027 |
| Either period, complaining late | Still accepted | Within 5 months if you are not owed redress |
| Never contacted by your lender | 31 August 2027 (final backstop) | Set by scheme rules |
| Decision you disagree with | 1 month to accept or challenge | Payment 1 month after acceptance |
Two points matter. Missing 30 June or 31 August 2026 does not shut you out — a late complaint is still accepted, and if it turns out you are not owed compensation your lender should tell you within five months of receiving it rather than by the fixed dates. And 31 August 2027 is the long-stop for people whose lender never gets in touch. Complaining early simply puts you in the organised queue rather than the ragged one.
Who is covered, and who is not
The scheme applies to motor finance agreements entered into between 6 April 2007 and 1 November 2024 — about 37 per cent of all agreements written in that window, on the FCA’s estimate. Agreements held by people who have since died are included, and beneficiaries can claim with a will or grant of probate.
The exclusions are specific, and worth checking before you dig out paperwork. Per the FCA’s car finance claims guidance, the scheme does not cover:
- Personal contract hire and other straight leases, because you were never buying the vehicle.
- Complaints already decided by a court or the Financial Ombudsman Service, or where you have already accepted compensation.
- Agreements over £25,000 where they were taken out before 6 April 2008 or were for business purposes.
- High-value loans above the 99.5th percentile for the year in question — £82,000 for 2024 — unless the vehicle was built or modified for accessibility.
- The cheapest 5 per cent of deals by interest rate in the year they were written, excluding genuine 0 per cent APR offers.
If you cannot remember who your lender was, the FCA suggests checking old bank statements, going back to the dealer, or pulling your credit file. Its list of car finance lenders gives addresses, phone numbers and, for many firms, a direct complaint form.
How much you might actually get
The headline average is about £830 per agreement, but it hides an enormous spread. What you get depends on the commission paid, when the agreement started, and which of three caps bites.
Most cases use a hybrid calculation: the average of an estimated loss figure and the commission actually paid, plus interest. The estimated loss is a percentage discount applied to the interest rate you were charged — 21 per cent for agreements between 6 April 2007 and 31 March 2014, and 17 per cent from 1 April 2014 onwards. The older discount is the larger one because the gap was wider then: the FCA’s data put the average APR on discretionary-commission deals at 13.6 per cent before April 2014 against 8.3 per cent without one, narrowing to 10.5 per cent against 9.1 per cent afterwards.
That result is then capped at the lowest of three ceilings: 90 per cent of the commission plus interest, the total cost of credit adjusted to the cheapest 5 per cent of the market, or the actual cost of credit on a simplified basis. The FCA expects roughly one in three cases to hit a cap.
The interest is not trivial
Redress carries simple interest at the annual average Bank of England base rate plus 1 per cent, with a floor of 3 per cent. The rates are fixed year by year in the FCA’s rules rather than tracking the rate of the day: 3 per cent for each year from 2014 to 2022, 5.68 per cent for 2023, 6.11 per cent for 2024, 5.25 per cent for 2025 and 4.49 per cent for 2026. (The Bank Rate itself was held at 3.75 per cent on 30 July 2026, with the next decision due on 17 September.) Because interest runs from the date you overpaid, an agreement that ended a decade ago can carry interest worth a meaningful fraction of the principal — one reason pre-2014 agreements are not the small fry people assume.
The £1.6 billion of non-redress cost is the firms’ own bill for running the scheme, down sharply from the £2.8 billion floated at consultation.
A refund is not a plan for the debt you still have
If compensation is coming, decide now where it goes — the most expensive balance you hold usually beats the savings account.
Explore GetSmartSaver →Why nothing is being paid right now
On 2 July 2026 the FCA partially suspended the scheme. Four parties brought legal challenges: Consumer Voice, represented by Courmacs Legal, alongside Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance. Until the litigation ends, lenders do not have to calculate or pay redress, or send the scheme communications on the original timetable.
Plenty continues. Firms must still identify relevant complaints, gather commission and disclosure data, tell people who are not owed anything and keep cooperating with the Financial Ombudsman, and brokers must give lenders any documents they ask for within a month of the request. The groundwork is being laid; only the cheque-writing is paused.
The Upper Tribunal has listed the challenges for 14 to 18 December 2026 or 16 to 26 February 2027, depending on expert evidence and disclosure. If the scheme is upheld and not appealed, the FCA expects payments during 2027. If it is overturned, compensation could slip to 2028 or later, and lenders have been told to be ready to fall back to a conventional complaint-led approach. An FCA update on the legal challenges in May 2026 set out that contingency.
The consequence is simple: nobody — no lender, no law firm, no claims company — can get you paid faster than the tribunal allows.
What to do this week
The FCA’s advice is blunt: “The best thing you can do, if you have concerns, is to complain to your lender.” That is the whole action. It costs nothing and preserves your position whatever the tribunal decides.
- Find the lender, not the dealer. The finance company named on your agreement is the one that owes you an answer.
- Use the lender’s own complaint form where one exists, or the FCA’s free template motor finance complaint letter.
- Include your basics — full name, address, date of birth and whatever agreement details you can find. You do not need the agreement number to complain.
- Complain once. Signing up with two representatives is a common and expensive mistake.
- Keep the acknowledgement. Your complaint date determines which response deadline applies to you.
If your agreement began before 1 April 2014, do it before 31 August 2026 and your lender owes you an answer by 18 January 2027. Leave it and you fall outside that fixed-date timetable.
Claims companies take a cut you do not need to pay
This is where a lot of money quietly leaks. The FCA warns that people who use a claims management company or law firm may end up paying for a service they do not need, “including up to 36% in fees, including VAT”. Its own research found that, among motor finance customers who knew they might be owed compensation, 41 per cent did not realise they would not need a claims firm or law firm.
FCA-regulated claims firms are bound by the fee caps in CMCOB 5.2. For redress up to £1,499 the cap is 30 per cent or £420, whichever is lower; from £1,500 to £9,999 it is 28 per cent or £2,500. Those caps exclude VAT, which is where the 36 per cent figure comes from. On the average £830 payout, that works out at roughly £249 before VAT and about £299 after it — for filling in a form you can complete yourself in ten minutes.
Law firms regulated by the Solicitors Regulation Authority are not covered by the FCA’s caps at all. They must bill in line with terms agreed up front, and any termination fee has to have been stated clearly at the outset. A joint FCA and SRA warning in February 2026 pushed two regulated claims firms to change their exit-fee policies, protecting around 70,000 consumers, and the FCA has had more than 800 misleading claims adverts removed or amended since January 2024.
You are paying for convenience, not access: the outcome under a set FCA formula is the same either way. If you have already signed up and are unhappy, complain to the Claims Management Ombudsman for FCA-regulated firms, or the Legal Ombudsman for solicitors.
If you disagree with your lender’s answer
When the scheme restarts, your lender sends a redress determination. You have one month to accept or challenge it, and payment follows a month after acceptance. Read the calculation, not just the total: the commission figure and the agreement dates move the number most.
If you are still unhappy, the Financial Ombudsman Service is free and independent. Its guidance on car finance commission complaints asks people to wait until they have heard from their lender, because scheme complaints need a lender determination first. Cases that reached the Ombudsman before 30 March 2026 continue on the normal track.
Where this fits in your wider finances
Motor finance is not the only place a regulator has stepped in on credit. The same direction of travel runs through the new buy now, pay later rules, and there is a much older statutory protection worth knowing about when you buy anything expensive on a card — Section 75 of the Consumer Credit Act covers purchases between £100 and £30,000. Both are separate routes from this scheme, not alternatives to it.
While the paperwork is out, look at what the car costs you now rather than in 2013. Premiums move fastest, so check where you stand against car insurance costs in 2026. And if you are still repaying finance, our loan repayment calculator shows what overpaying saves in interest — a more reliable gain than a payout that may not land until 2027.
Frequently asked questions
What is the deadline for car finance compensation?
It depends on your agreement date. For agreements from 1 April 2014 onwards the date was 30 June 2026. For agreements between 6 April 2007 and 31 March 2014 it is 31 August 2026, with your lender due to respond by 18 January 2027. A final backstop of 31 August 2027 applies to anyone whose lender never made contact.
How much car finance compensation will I get?
The FCA expects an average of about £830 per agreement paid, from a pool of 12.1 million eligible agreements, but the range is wide. Most cases use an average of an estimated loss figure and the commission actually paid, with interest at the Bank of England base rate plus 1 per cent, subject to a 3 per cent floor. Around one in three cases hits a cap.
Do I need a claims management company?
No. The FCA says you do not need a claims firm or law firm to take part, and warns you could pay up to 36 per cent in fees including VAT out of your compensation. On the average £830 payout that is roughly £299. Complaining direct is free, and the FCA publishes a lender list and a template complaint letter.
Why has the car finance redress scheme been suspended?
The FCA partially suspended it on 2 July 2026 after four legal challenges from Consumer Voice, Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance. The Upper Tribunal will hear them in December 2026 or February 2027. Lenders need not calculate or pay redress meanwhile, but must still gather data and answer people who are not owed anything.
Which car finance agreements are excluded?
Personal contract hire and other leases are out, as are complaints already decided by a court or the Financial Ombudsman, and cases where compensation was already accepted. So are agreements over £25,000 that were taken out before 6 April 2008 or for business purposes, very high-value loans above £82,000 in 2024, and the cheapest 5 per cent of deals by rate each year.
What if I miss the 31 August 2026 deadline?
You can still complain. The FCA says that if you complain after the scheme dates and you are not owed compensation, your lender should tell you within five months of receiving your complaint, rather than by the fixed 18 November 2026 or 18 January 2027 dates. The absolute long-stop for those never contacted by a lender is 31 August 2027.
Last reviewed: August 2026. Figures and dates are taken from FCA publications current on 18 August 2026, including PS26/3 and the FCA’s car finance claims page, and reflect the 2026/27 tax year running from 6 April 2026 to 5 April 2027. The scheme is UK-wide, covering England, Scotland, Wales and Northern Ireland, and is subject to legal challenge in the Upper Tribunal, so dates may move. This article is general information, not personal financial advice — check your own position with the FCA or gov.uk, or get free help from Citizens Advice or MoneyHelper, before acting on it.
