Claiming if Your Car Finance Lender Has Gone Bust

Can you claim if the lender has gone bust?

A lender going bust doesn't automatically wipe out a valid claim, but where you send it depends on the firm's status. The first step is finding out what happened to the lender.

Some firms are bought by another company that may take on their obligations; some go into administration; some simply fail. Each has a different route. The FCA scheme (PS26/3) covers in-scope agreements, but parts of it have been suspended since 29 June 2026 pending a legal challenge, and a lender that has failed may not be able to pay.

Your right to redress is about the agreement and the commission, not whether the original lender still trades. A closed lender can complicate the practical route, but it does not end the claim.

Where your claim goes

Your claim follows the firm: to a successor company or an administrator, as the FSCS does not cover car finance. Which one applies depends on how the lender wound down.

If you're not sure which applies, how to find your lender and the FCA register are the right starting points.

What the FSCS is, and why it does not cover car finance

The Financial Services Compensation Scheme (FSCS) is the UK's statutory compensation fund of last resort for failed financial firms. It can pay some regulated claims when a firm cannot, but the FCA says car finance borrowing isn't one of them.

The FSCS is funded by the financial services industry, not by taxpayers, and there is no charge to you for using it. It covers claims against firms declared in default, but there are limits on the amount, and not every agreement or firm is in scope. The FCA's car finance guidance says this type of borrowing isn't covered by the FSCS, so if your lender goes out of business, you may not get any compensation.

So for a commission claim, don't count on the FSCS stepping in. If the firm was bought or is in administration, the successor or administrator is where you send it. You still complain free, and you still do not need a CMC.

How to start

Find out the firm's current status, then send your complaint to the right place, for free. The basics of your case don't change.

1. Identify the lender and use the FCA register to check whether it still trades, was bought, or has gone into administration.
2. Send your complaint to the successor firm or administrator as appropriate, using our letter template as a base.
3. If the firm is still regulated, the Financial Ombudsman Service may be able to help, for free; the FSCS does not cover car finance.

Watch-outs with closed lenders

A closed lender can mean lower or capped payouts and slower timelines, but there are no fees if you DIY.

• Administration can mean creditors (including you) are paid a percentage, over time, and there may be a cap.
• FSCS limits don't help here, because the FCA says car finance borrowing isn't covered by the FSCS at all.
• Don't pay a claims firm to do what you or the administrator can do free.
• Keep all paperwork, because more evidence makes the process smoother.

Estimate your position

Even with a closed lender, it's worth a free estimate before you start.

Try the compensation estimator, and read how to claim. Claiming is free and you can do it yourself: complain to your lender first, then escalate to the Financial Ombudsman Service. You do not need a claims-management company taking a cut.

How to find out what happened to your lender

The FCA register and Companies House tell you whether your lender still trades, was bought, or failed. Start there before sending anything.

If the lender changed name but still trades, you complain to the current firm. If it was bought, the buyer handles it. If it's in administration, the administrators handle it; if it failed with nothing left, you may not get any compensation.

1. Search the FCA register (register.fca.org.uk) for the lender's name. It shows the current status and any successor.
2. If the firm is gone, search Companies House for the firm's fate (administration, strike-off, acquisition).
3. Don't rely on the FSCS: the FCA says car finance borrowing isn't covered, so a failed lender's administrator is where a claim goes.
4. Note any successor firm that took on the book, because that firm is often the one you complain to.

Time limits with closed lenders

Time limits can be tighter or less clear when a lender has failed, so it's worth acting promptly. Don't wait to find out the route before complaining.

Administrators set their own cut-off dates for claims against failed firms, which can be shorter than the main scheme's 31 August 2027 deadline (a date in the scheme rules as made, which may change after the legal challenge). Once you know the firm is gone, send a complaint quickly to the right body. A free DIY complaint preserves your position while you work out the details.

Any figure you see is an estimate, not a promise. Nobody is guaranteed a payout, and the amount depends on your own agreement.

Successor firms: who actually owes you

When a lender is bought, the buying firm may take on its regulated obligations, including the duty to handle commission complaints. Whether it does depends on the terms of the sale, so ask.

A sale of a loan book can transfer both the asset (your agreement) and the liability (the complaints against it), but the sale terms can also leave liability for what happened before the sale with the seller or its administrator. So don't accept a bare 'it happened before we bought the book' as the end of it: ask the firm in writing who is now responsible for complaints about your agreement. Where the buyer took on that liability, it steps into the original lender's shoes for complaint handling, and the FCA scheme rules apply to it as they did to the original lender.

In practice this is often the cleanest route: the successor is a going concern with a complaints process, though the scheme's compensation steps are on hold for every lender until the legal challenge ends. Use our letter template addressed to the new firm, quoting your original agreement number.

Administration: paid as a creditor

If your lender went into administration, you join the queue of creditors, which can mean a percentage of your redress, paid over time, and sometimes within limits.

An administrator's job is to divide what the failed firm has left among the people it owes. Your commission complaint is treated as a claim in that process. You may receive less than the full scheme figure, and you may receive it later, because administrators work through the book methodically. Don't expect the FSCS to top it up: the FCA says this type of borrowing isn't covered (see the next section).

File your complaint with the administrators using the letter template, and ask them to acknowledge it in writing. Getting on the creditor list early matters: administrators set deadlines for claims that can be shorter than the main scheme's 31 August 2027 cut-off, as the scheme rules were made.

Why FSCS limits do not help with car finance

The Financial Services Compensation Scheme can pay certain regulated claims against declared-in-default firms, up to a limit per firm. Car finance borrowing isn't one of them, according to the FCA, so the FSCS limit doesn't help with a commission claim.

The FSCS is funded by the financial services industry and is free to use. It pays out when a firm is formally declared in default and the claim type is one it covers. The FCA's car finance guidance says this type of borrowing isn't covered by the FSCS, so if your lender goes out of business, you may not get any compensation. Your route against a failed lender is a claim to its administrator as a creditor, which may pay only part of what you're owed.

The FCA scheme (PS26/3) sets how much a lender owes, but it cannot make a failed lender pay, and parts of it have been suspended since 29 June 2026 pending the legal challenge. The FCA's car finance complaints page explains the current position; treat anything here as general information and check with the administrator for your case.