Car Finance Claims News & Redress Updates

What's happening now

As of 10 August 2026, the FCA's motor finance redress scheme is open and running. Lenders are working through and paying the newer qualifying agreements, even as the scheme's lawfulness is challenged in court. Nothing has been cancelled, and the free DIY route carries on whatever happens.

A few things are worth knowing up front. The scheme is open for business: firms started on agreements from 1 April 2014 onward on 30 June 2026, with the earlier 2007–2014 wave following on 31 August 2026. It is also under legal challenge (since 1 May 2026), which the FCA says it will defend "robustly as lawful" — a process that could shift when payouts land, but not whether redress is owed. And the free DIY route hasn't changed: complain to your lender whenever you like and keep 100% of anything you're owed.

If you took out car finance between 6 April 2007 and 1 November 2024 through a dealer or broker, you could be in scope. Start with the scandal explained, then the full dated timeline.

Latest developments

The motor finance redress story keeps shifting. These are the milestones that matter, newest first. We refresh the list whenever the FCA publishes an update or a court date moves.

Every entry is dated and sourced. For the full run from the 2007 start of the window through to the expected 2027 payouts, see the canonical redress timeline.

• 30 June 2026 — Scheme opens (first wave). Lenders begin assessing and paying qualifying agreements from 1 April 2014 onward under PS26/3. Source: FCA, Policy Statement PS26/3 (30 March 2026, updated 8 May 2026).
• 1 May 2026 — Scheme legally challenged. The FCA confirms the scheme has been challenged and says it will defend it "robustly as lawful." The challenge is about the lawfulness of the scheme's design, not the underlying right to redress. Source: FCA statement (1 May 2026).
• 8 May 2026 — PS26/3 updated. The FCA publishes an update to the policy statement, setting out operational detail for firms joining the scheme. Source: FCA, PS26/3 (updated).
• 30 March 2026 — Scheme finalised (PS26/3). The FCA confirms the motor finance consumer redress scheme: an estimated ~£7.5bn of redress across roughly 12.1 million agreements, averaging about ~£829 per agreement. Source: FCA, Policy Statement PS26/3.
• 1 August 2025 — Supreme Court ruling. The UK Supreme Court rules that undisclosed motor finance commission can make the lending relationship unfair under section 140A of the Consumer Credit Act 1974 — paving the way for an industry-wide scheme. Source: Supreme Court of the United Kingdom (supremecourt.uk).
• 28 January 2021 — DCAs banned. The FCA bans new discretionary commission arrangements, the clearest conflict in the whole scandal. Source: FCA.

What the scheme means for you

If your car finance between 6 April 2007 and 1 November 2024 carried an undisclosed discretionary commission, a high-commission arrangement or a contractual tie, this scheme is your route to redress. It applies the same test across every firm.

The scheme homes in on three specific disclosure failures (set out in PS26/3): an undisclosed DCA, an undisclosed high-commission arrangement (commission at least 39% of the total cost of credit and at least 10% of the loan), or an undisclosed contractual tie. 0% and minimal-commission deals are out. Run through the honest checklist on am I eligible.

Redress centres on the extra interest you paid because of the commission, plus interest on top, and a cap bites on roughly one in three qualifying agreements. Any figure you see is an estimate, not a promise — nobody is guaranteed a payout, and the amount depends on your own agreement.

How to claim (free)

You can claim for free, yourself, in two steps. Complain to your lender first; if you don't like the answer, take it to the Financial Ombudsman Service. No claims-management company needs to take a cut.

A claims-management company (CMC) can take up to about 36% of whatever you get back. On the scheme average of around ~£829 per agreement, that's roughly £300 gone; on a larger payout it climbs in step. Doing it yourself keeps the full 100%, and there's nothing a CMC can file that you can't file yourself.

Follow the steps on how to claim, and use our free letter template to write to your lender. The whole route costs you nothing.

The legal challenge, explained

On 1 May 2026 the FCA confirmed its redress scheme had been legally challenged, and said it would defend it "robustly as lawful." The dispute is over the lawfulness of the scheme's design — not over whether redress is owed.

What the legal process (a judicial review of the scheme's rules) is most likely to affect is when bulk payouts begin, not whether the underlying right to redress exists. The Supreme Court's August 2025 ruling — that undisclosed commission can make the relationship unfair under section 140A of the Consumer Credit Act 1974 — still stands. We're not trying to be alarmist here: nothing has been cancelled, the scheme is still operating, and free DIY complaints keep running regardless.

If the challenge shifts the timeline or the rules, the FCA will publish new dates and we'll update this page. Read more on the FCA scheme and when claims will be paid.

Watch-outs: scams and high-fee claims firms

Where there's a large, high-profile scheme, scams and high-fee claims firms follow. The FCA and Action Fraud have repeatedly warned about cold calls, fake "official" letters and upfront-fee offers.

Claiming "through us" isn't a thing — we run no claims. Any figure you see is an estimate, not a promise — nobody is guaranteed a payout, and the amount depends on your own agreement.

• No real scheme asks for an upfront fee. If someone wants payment before you get redress, treat it as a red flag.
• The FCA never cold-calls about your car finance. A genuine firm contacting you will be your lender, named on your agreement.
• CMCs can charge up to about 36% of any payout — money you keep entirely if you DIY.
• Ignore 'act now before the deadline' pressure. The real consumer deadline is 31 August 2027 if no firm contacts you — not a 'closing soon' countdown.