Yes. If someone who has died had an eligible car finance agreement, their death does not automatically prevent compensation from being claimed.
The Financial Conduct Authority (FCA) has confirmed that its Motor Finance Compensation Scheme covers eligible agreements held by customers who have since died [1]. Depending on the circumstances, a personal representative or beneficiary of the deceased person's estate may be able to pursue a car finance claim on their behalf.
This could be relevant to families dealing with an estate where the deceased previously bought a car, van, motorbike or another eligible vehicle using finance.
Old PCP car finance or hire purchase agreements can easily be overlooked, particularly if the vehicle was sold or changed several years before the person's death.
Here is what families, executors and beneficiaries need to know about car finance compensation after someone has died.
Can you make a car finance claim for someone who has died?
Potentially, yes.
The FCA specifically addresses deceased customers in its guidance on car finance claims. It confirms that the compensation scheme covers eligible agreements held by people who have since died and says their beneficiaries may be able to claim.
There are still eligibility requirements.
The scheme generally covers certain motor finance agreements entered into between 6 April 2007 and 1 November 2024, including hire purchase agreements such as Personal Contract Purchase (PCP).
However, being within the date range does not automatically mean compensation is due.
The same rules apply whether someone is considering a car finance claim themselves or an estate is looking into possible mis-sold car finance after the customer's death. A potential car finance mis-selling complaint still has to meet the FCA's eligibility requirements.
These include requirements relating to the commission arrangement and whether the customer was given sufficient information about arrangements between the lender and broker.
The same assessment applies where the customer has died.
Who can make the claim on behalf of someone who has died?
The FCA's rules recognise that lenders may need to deal with somebody other than the original customer after that person has died.
Where a lender is required to contact a customer and knows that the customer is deceased, FCA rules require it to take all reasonable steps to communicate instead with either a personal representative of the customer's estate or beneficiaries of the estate.
Families do not necessarily have to wait for the lender to make contact.
The FCA says someone acting on behalf of a deceased customer can contact the lender directly. They should use their own contact details and make it clear that they are acting for somebody who has died.
The lender will need to establish that the person has the appropriate authority before any compensation can be paid.
What documents might you need?
The FCA advises representatives to provide as much information as possible about the deceased customer when contacting a lender.
This could include their:
- full name
- previous address or addresses
- date of birth
- known car finance details
The lender is also likely to ask for evidence showing who has authority to deal with the deceased person's affairs.
According to the FCA, this may include a copy of the will or grant of probate so that the lender can establish that any compensation is being paid to the appropriate person.
Exactly what evidence is required may depend on the circumstances of the estate and the lender's verification process.
It is therefore sensible to ask the lender what documentation it requires rather than assuming the same documents will be necessary in every case.
What if you do not have the old car finance paperwork?
Not having the original agreement does not necessarily prevent you from making enquiries about possible car finance compensation.
This can be particularly important when dealing with a deceased person's estate because paperwork for a car owned many years ago may no longer exist.
If you know who the lender was, you can contact it and provide as much identifying information as possible.
If you do not know the lender, there are several places you can check.
Old bank statements may show payments to the finance provider. The dealership where the vehicle was purchased may also have information about the lender.
Credit records can sometimes help identify historic finance agreements as well.
The FCA provides a searchable list of lenders involved in motor finance complaints, including contact information and ways to submit a complaint.
When approaching a lender about someone who has died, make it clear from the beginning that you are acting on behalf of the deceased customer or their estate.
Can an old PCP agreement qualify?
Yes. An eligible PCP agreement can fall within the scheme, so a potential PCP claim does not necessarily end because the person who held the agreement has died.
PCP is a type of hire purchase and is included within the motor finance agreements covered by the FCA scheme where the relevant conditions are satisfied. This means some historic PCP finance claims may be considered, including cases involving potentially mis-sold PCP car finance.
However, not every PCP car finance agreement qualifies.
The FCA scheme is concerned with particular commission arrangements and whether customers were given enough information about them when entering into their finance agreements.
These include discretionary commission arrangements, certain high commission arrangements and certain contractual ties between lenders and brokers.
A PCP compensation claim therefore still needs to satisfy the FCA's eligibility criteria. Finding an old PCP agreement is only the first step.
The same principle applies to PCP claims more generally. The fact that someone used PCP does not by itself establish that the finance was mis-sold or that compensation is due.
What if the deceased person had several car finance agreements?
Each agreement may need to be considered separately.
Someone who regularly changed their vehicle may have had more than one PCP or hire purchase agreement during the period covered by the scheme.
For example, a person could have financed different cars in 2009, 2013 and 2018.
Those agreements should not simply be treated as one car finance claim. Each agreement can involve a different lender, broker, commission arrangement and set of circumstances.
One agreement might qualify while another does not.
This makes it worth checking the deceased person's finance history rather than looking only at the vehicle they owned immediately before they died.
How much car finance compensation could the estate receive?
There is no fixed amount.
That is an average rather than a guaranteed payment.
Consumers sometimes describe compensation as a car finance refund or PCP refund, but there is no standard refund amount.
Some eligible customers may receive more and others less. An agreement could also be assessed and found not to qualify for compensation.
The FCA's calculation depends on factors including the type and size of the commission, the estimated financial loss and interest.
In the most serious cases, compensation can include all of the commission paid plus interest. For most eligible agreements, the FCA uses a calculation based on the average of estimated loss and commission, with interest added and applicable caps.
Families should therefore avoid estimating an estate's potential compensation simply by multiplying £830 by the number of old finance agreements they find.
Each agreement has to be assessed individually.
Who receives the compensation if the customer has died?
The lender needs to make sure that compensation is paid to the appropriate person.
This is one reason it may ask for documents such as a will or grant of probate.
The FCA's rules require lenders that know a customer has died to take reasonable steps to communicate with the personal representative or beneficiaries of the estate where contact is required under the scheme.
The exact handling of any payment will depend on the circumstances of the estate and the authority of the person dealing with the lender.
If there is uncertainty about who is entitled to act for the estate, it may be necessary to resolve that before the lender can release compensation.
What if the lender contacts someone who has already died?
Families should not assume that a letter addressed to someone who has died means nothing can be done.
If a lender becomes aware that the customer has died, the FCA expects it to take reasonable steps to identify and communicate with an appropriate personal representative or beneficiary instead.
A family member or estate representative who receives correspondence addressed to the deceased customer can contact the lender and explain the situation.
They should not simply respond as though they were the original customer.
Instead, they should provide their own details, explain their relationship to the deceased person's estate and ask the lender what evidence is needed to continue dealing with the matter.
Do families need to use a claims company or solicitor?
No.
A representative can make a complaint directly to the lender without paying someone to do it for them.
The FCA provides free information, lender contact details and complaint tools for consumers.
Some families may nevertheless choose professional support, particularly where an estate is complicated, paperwork is missing or several historic agreements are involved.
A solicitor or FCA-regulated claims management company can be used if preferred, but fees may apply.
Before appointing anyone, representatives should understand what service is being provided, what fees could be charged and whether another representative has already been instructed in relation to the same agreement.
What does the wider car finance scandal mean for these claims?
The wider car finance scandal concerns historic commission arrangements between motor finance lenders and brokers and whether some consumers were treated unfairly.
The FCA subsequently established an industry-wide compensation scheme covering certain agreements from 6 April 2007 to 1 November 2024.
However, not everyone who financed a vehicle during this period was affected by car finance mis-selling, and being part of the relevant period does not automatically establish a claim.
The same distinction is important when families discover old finance documents belonging to someone who has died.
An agreement can be checked, but eligibility for compensation still depends on the circumstances of that particular agreement.
Will there be car finance payouts in 2026?
Consumers searching for information about payouts 2026 should be aware that the original compensation timetable has changed.
The Motor Finance Compensation Scheme was established in March 2026, but it was subsequently challenged before the Upper Tribunal.
Parts of the scheme have therefore been suspended while the legal proceedings continue [4].
The FCA says the case is expected to be heard either in December 2026 or February 2027.
Until the legal process concludes, lenders do not currently have to calculate or pay compensation under the suspended parts of the scheme.
If the scheme is upheld and the judgment is not appealed, the FCA currently expects compensation payments under the scheme to begin in 2027.
Families looking for the latest FCA car finance information should therefore check the regulator's current guidance rather than relying on earlier estimates of when payments might begin.
The delay does not mean families should necessarily wait before making a complaint.
The FCA's current advice to people concerned about historic motor finance remains to complain to the lender.
Is there a deadline for making a claim?
There is an important date to be aware of, but it needs to be understood correctly.
Under the FCA scheme, lenders are expected to contact certain customers who have not already complained where their records indicate they are likely to be owed compensation.
If someone is not contacted by their lender, the current scheme provides until 31 August 2027 to make a complaint and join the scheme.
This is particularly relevant when dealing with a deceased customer's affairs because the lender may not know that the customer has died or may not have current details for the estate's representative.
Families should therefore not assume the lender will automatically find them.
If you discover an old finance agreement that may be relevant, you can approach the lender directly.
How to carry out a car finance refund check for someone who has died
A car finance refund check or PCP claim check essentially starts with identifying relevant historic agreements.
Finding an agreement does not mean it automatically qualifies for compensation. It simply provides the information needed to establish whether further enquiries should be made.
Start with information already available within the estate.
Look for old finance agreements, vehicle purchase documents, dealership correspondence and bank statements showing regular payments to finance providers.
Emails may also contain finance documentation or correspondence from a dealership or lender.
If several agreements are found, potential PCP car claims and other hire purchase agreements should be considered individually because their dates, lenders and commission arrangements may differ.
If you identify the lender, check its current contact information before sending personal or estate documents. The FCA maintains a list of lenders and their official complaint routes.
Provide as much information about the deceased customer and the agreement as you reasonably can.
You do not need to know at the outset whether the agreement definitely qualifies. The purpose of contacting the lender is to establish the relevant information and have the agreement considered where appropriate.
What should families do now?
Families administering an estate may already have a long list of financial matters to deal with, from bank accounts and pensions to property and outstanding debts.
Historic vehicle finance may not immediately come to mind.
But where someone used PCP or hire purchase between 6 April 2007 and 1 November 2024, it may be worth checking whether there are relevant agreements that have not yet been considered.
The customer's death does not automatically remove an otherwise eligible agreement from the FCA Motor Finance Compensation Scheme.
Personal representatives and beneficiaries may be able to pursue the matter, although they should expect the lender to request evidence establishing their authority before releasing any compensation.
Finding an old agreement does not guarantee a car finance refund, PCP refund or other compensation. Eligibility still depends on the individual agreement and the FCA's scheme rules.
The important point is that a potential car finance claim does not necessarily end when the customer dies. Where an eligible agreement forms part of a deceased person's financial history, the estate may still have an opportunity to receive any car finance compensation that would otherwise have been due.
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References:
- The Financial Conduct Authority (FCA) has confirmed that its Motor Finance Compensation Scheme covers eligible agreements held by customers who have since died - https://www.fca.org.uk/consumers/car-finance-complaints
- The FCA estimates that around 37% of agreements made during the relevant period could be eligible for compensation, representing approximately 12.1 million agreements - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- The FCA currently says people who receive car finance compensation under the scheme are expected to receive an average of around £830 per eligible agreement - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- Parts of the scheme have therefore been suspended while the legal proceedings continue - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended