Why the FCA is acting now
The FCA confirmed the motor finance redress scheme on 30th March 2026. It followed concerns that many firms did not give customers clear information about commission. The aim is to create a clear framework for firms to review affected agreements and pay compensation where consumers lost out.
For years, dealers and brokers earned commission on car finance agreements. In some cases, higher interest charges increased that commission. Many customers say firms did not explain this clearly. As a result, some drivers may have paid more than they should have. That is why the FCA has adopted a market-wide redress scheme.
A single redress scheme should give drivers a clearer route to compensation. It should also reduce delays and deliver more consistent outcomes across lenders.
Latest update: May 2026
On 1st May 2026, the FCA confirmed that its motor finance redress scheme had been legally challenged.
The FCA says it will defend the scheme. However, the legal challenges may affect the final timetable.
Drivers can still complain directly to their lender if they have concerns about car finance commission.
The FCA also announced a review into claims management practices on 6th May 2026. This review will look at issues such as misleading adverts, aggressive marketing, unfair exit fees, and unclear sign-up processes.
Who could qualify under the FCA redress scheme for car finance
Mis-selling happens when people do not receive the key information they need to make an informed decision. You could fall within scope if you financed a car, motorbike or van between 6th April 2007 and 1st November 2024. This includes PCP and HP agreements. In most cases, a dealer or broker arranged the finance and a lender funded it. If commission was involved and not explained clearly, your agreement could fall within scope of the FCA redress scheme for car finance. However, not every agreement will qualify. The FCA says some agreements will be treated as fair, including those with very low commission, 0% APR deals, and some arrangements with visible links between the lender, manufacturer, and franchised dealer.
Ask yourself:
- Was your agreement taken out between 6th April 2007 and 1st November 2024?
- Did a dealer or broker arrange the finance?
- Did the lender pay commission that was not made clear?
If you answered “yes” to each, your agreement could fall within scope of the FCA redress scheme for car finance.
How the FCA redress scheme could work
The FCA scheme is designed to make lenders review affected agreements in a consistent way.
Lenders may need to check whether commission was paid, whether it affected the customer’s cost, and whether the customer received clear information.
If the agreement falls within scope, the lender may need to calculate redress. This could include a refund linked to unfair commission, plus interest where it applies.
The scheme is free for consumers to use. You can complain to your lender directly.
How much could drivers receive?
Payouts will vary by case. They should reflect any extra interest or loss linked to undisclosed commission. The FCA says around 12.1 million agreements may fall within the scheme. It also says average payouts could be around £830 per agreement. However, each case will depend on the agreement, commission model, and lender review. Either way, the aim is to deliver a fairer and more consistent outcome. For a broader look at car finance compensation, expected payout timing and what drivers should do next, read our latest car finance compensation update.
What drivers should do now under the FCA car finance redress scheme
Now the FCA car finance redress scheme is confirmed, it is worth gathering your paperwork and checking the details of your agreement. Try to identify the lender, the broker or dealer, and the date the finance started. You should also keep copies of any emails, letters or earlier complaints linked to the agreement.
If you think you may have been affected, you can stay up to date with FCA developments and review your options carefully. Some drivers choose to complain directly, while others prefer support with finding agreements and preparing their case.
As the FCA redress scheme moves into implementation, keeping clear records now could make the next steps easier. If you want to see whether your agreement could be affected, you can use our short survey to find your agreements.
When should you hear from your lender?
The final timetable is now uncertain because the FCA scheme faces a legal challenge. The FCA says this will delay payouts, and it will confirm the scheme timeline when it can.
However, customers who complain before the scheme starts may have their case assessed sooner.
Eligible customers who do not complain may still be contacted by their lender after the scheme starts.
FCA redress scheme car finance: common questions
Yes. It covers regulated car finance agreements, including PCP and HP. The focus is on commission and disclosure.
No. The scheme is lender-led, and the FCA says you do not need to use a claims management company or law firm to take part. You can also complain directly. Some drivers still choose extra support with gathering evidence, tracking updates and understanding the next steps.
Yes. On 1st May 2026, the FCA confirmed that the scheme had been legally challenged. The FCA says it will defend the scheme, but the timetable may change.
If you have already complained and had an acknowledgement from your lender, you do not need to do anything for now. The FCA says those customers should be compensated sooner than people who wait to be contacted.
There may still be routes to redress. The details will depend on the firm involved and the dates of the agreement.
No. Some agreements are outside scope, including 0% APR deals, some low-commission cases, some clearly linked manufacturer and dealer arrangements, and certain high-value or excluded agreements.
That depends on when your agreement began and whether you complain before the scheme starts. The FCA says the legal challenge will delay payouts, and the final timeline is now uncertain.
For the latest official position, read the FCA’s car finance complaints guidance.
Why a single redress scheme matters
A single redress scheme can help lenders assess cases in a consistent way. It can also give drivers a clearer route to compensation.
However, the final timetable may depend on the outcome of the legal challenges.
Our view on what comes next
The FCA redress scheme brings more structure to a complex issue. It could create a clearer route for affected drivers.
However, the scheme now faces legal challenges. Drivers should keep their paperwork, track FCA updates, and understand whether their agreement may fall within scope.
That is why preparation matters. Drivers should keep their paperwork, track updates, and understand how the confirmed scheme could affect their agreement. Taking these steps now could make the process easier as the scheme moves through implementation.
This scheme is not only about fixing past harm. It could also set a new benchmark for motor finance. For lenders and brokers, it is a chance to rebuild trust, improve standards, and show what good practice looks like in a changing market.
Why this page matters
This page explains the confirmed FCA redress scheme for car finance and what it could mean for affected drivers. If you want to see whether your own agreement could be affected, you can use our short survey to find your agreements.
We also publish updates on lender-specific issues and wider market developments, including Black Horse and MotoNovo
Next steps if you think your agreement was affected
If you took out car finance between 6th April 2007 and 1st November 2024, now is a good time to review your paperwork and identify your lender. The FCA redress scheme for car finance could affect a wide range of agreements, especially where commission was not explained clearly.
You can also take simple steps now, such as checking old finance documents, reviewing past correspondence, and keeping track of FCA updates. That way, you will be in a stronger position as the scheme moves through implementation.
If you want to see whether your agreement could be affected, you can use our short survey to find your agreements. It only takes a few minutes to check your lenders.
