Millions eligible for car finance claims as payouts 2026 begin

LONDON — Millions of motorists will receive an average of £829 in car finance compensation under a £9.1 billion FCA car finance scheme [1] confirmed by the Financial Conduct Authority earlier today. The decision marks a major development in the UK’s car finance scandal, with payouts 2026 expected for early car finance claims.

Who qualifies for car finance claims and PCP claims

The FCA confirmed that 12.1 million agreements will qualify for car finance claims, covering deals made between April 6, 2007, and November 1, 2024 [2].

You may be eligible to submit a:

• car finance claim
• PCP claim
• multiple PCP claims

If your agreement involved mis-sold car finance, including:

• Discretionary commission arrangements (DCA)
• High commission structures
• Contractual ties between lenders and brokers

Only one condition needs to be met to qualify for a car finance claim or PCP refund.

How much car finance compensation will you get

Under the FCA car finance scheme:

• Average payout: £829 per agreement [3]
• Estimated payouts: £7.5 billion (at 75% uptake) [4]
• Total cost: £9.1 billion including admin

Consumers may receive a car finance refund or PCP refund, depending on the level of car finance mis-selling.

Why payouts have increased despite fewer claims

Although eligible agreements dropped from 14.2 million to 12.1 million, average car finance compensation increased from £695 to £829.

This is due to:

• Tightened eligibility criteria
• Higher compensation for older agreements
• Adjustments to reflect actual consumer losses
• Caps to ensure fair car finance refunds

FCA car finance implementation timeline (key dates)

The FCA car finance scheme includes a short implementation period before car finance claims are processed:

• June 30, 2026 — for agreements from April 1, 2014
• August 31, 2026 — for agreements before April 2014

During this period, firms will prepare systems to handle car finance claims, PCP claims, and calculate car finance compensation.

Once complete:

• Early car finance claims → likely payouts 2026
• Later claims → may extend into 2027

When payouts 2026 will be made

The FCA expects:

• Millions of car finance claims paid in 2026
• Majority completed by end of 2027

Submitting a car finance claim early increases the likelihood of receiving faster car finance refunds so it is better to do a car finance refund check to know if you are eligible.

What caused the car finance scandal

The car finance scandal centres on car finance mis-selling, where dealers received commissions from lenders without properly informing customers.

Resulted in:

• Higher interest rates
• Hidden commissions
• Expensive borrowing

Claims are based on the above unfair practices that underpin millions of car finance deals and PCP claims.

FCA vs court route for car finance

Motorists have two options when claiming back money from car finance and PCP mis-selling:

The FCA route:

• Fast, standardised car finance compensation
• Simple process

The court route:

• Potentially larger car finance refunds or PCP refund
• Legal fees mean that the final payout will be less

Industry response to FCA car finance scheme

Major lenders including Lloyds, Santander and Barclays have set aside billions for car finance claims.

However:

• Some lenders argue compensation is too high
• Consumer groups say car finance refunds should be higher
• Legal challenges to the FCA car finance scheme remain possible

What to do next

Motorists who took out finance between 2007 and 2024 should consider submitting a car finance claim as soon as possible.

With millions eligible and payouts 2026 approaching, early car finance claims are more likely to be processed first.

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References:

1. £829 in car finance compensation under a £9.1 billion FCA car finance scheme - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme 
2. FCA confirmed that 12.1 million agreements will qualify for car finance claims, covering deals made between April 6, 2007, and November 1, 2024 - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. Average payout: £829 per agreement - https://www.bbc.com/news/live/czx94evl5lrt
4. Estimated payouts: £7.5 billion (at 75% uptake) - https://www.dailymail.co.uk/money/cars/article-15691403/FCA-says-12MILLION-829-payouts-car-finance-compensation.html