The FCA car finance investigation has reached a point where millions of drivers are waiting to find out whether they will receive compensation. For many people, this is the first time they have looked closely at how their car finance agreement was sold or whether a commission model shaped the interest rate they paid. The scale of the car finance scandal has pushed the FCA to design a structured redress scheme [1] that will decide how refunds are calculated, how lenders must review historic cases, and how long drivers may wait for outcomes.

The consultation continues until 12 December 2025 [2]. During this period, the FCA is working through thousands of pages of evidence, legal arguments, economic assessments, and fairness considerations. While the final rulebook has not been published yet, the FCA has a long track record of creating industry-wide redress schemes for financial products that affected large groups of consumers. Past experience gives strong clues about how the FCA car finance claims framework may be shaped.

This article sets out what the FCA is likely to include, how previous schemes have worked, what motorists may experience once the scheme begins, and why submitting a car finance claim or PCP claim now still matters, even while lenders are paused.

Why the FCA Is Building a Redress Scheme

The FCA’s job is to look out for consumers, make sure firms play by the rules, and keep the market fair. When a problem affects a large number of people at the same time, the FCA usually steps in to create a clear, structured process. This stops companies from making up their own approach and helps avoid the confusion that comes from inconsistent or unclear complaint handling.

The car finance scandal is exactly this type of case. Over many years, lenders and dealers used commission models that were not explained clearly, particularly discretionary commission models that increased the interest rate customers paid. Complaints rose quickly once this came to light. Outcomes varied across lenders, decisions took months, and many customers felt they were being sent in circles.

A structured FCA car finance scheme [3] is intended to create stability. It gives the industry one set of rules rather than hundreds. It gives consumers a clear framework rather than uncertainty. And it creates the kind of large-scale, organised process that can handle millions of car finance claims without leaving people behind.

What a Redress Scheme Means in FCA Terms

A redress scheme [4] is not simply a compensation programme. It is an entire system of rules. When the FCA creates one, it acts as the blueprint for how every lender must behave.

A typical FCA scheme includes:

• A shared method for deciding whether customers suffered unfair treatment
• A consistent formula for calculating compensation
• Evidence requirements that lenders must follow
• Clear timelines for reviewing cases
• Processes for escalation if customers disagree
• Oversight to ensure the scheme is implemented correctly

The point is to avoid the chaos of every lender interpreting complaints differently. Instead, the FCA car finance claims scheme will give the industry one standard.

What the FCA Consultation Suggests So Far

While the consultation is not yet complete, the FCA has already set out several areas it intends to define. These give insight into how the final FCA car finance scheme may look.

Eligibility

The FCA has indicated that the scheme will cover:

• PCP agreements
• HP agreements
• Conditional sale agreements
• Vehicles for personal and sole-trader use under £25,000
• Agreements from 6 April 2007 to 1 November 2024

Lease arrangements such as PCH are excluded because they are rental products, not credit agreements.

This closely matches what consumers have already seen in early material about mis-sold car finance and the rapidly developing car finance scandal.

How Lenders Must Identify Affected Customers

The FCA is likely to require lenders to review historic agreements and assess:

• Whether commission was disclosed
• Whether a discretionary commission model influenced the interest rate
• Internal sales notes
• Call transcripts where available
• Dealer relationships
• Whether alternative lenders were available at the time

This is significant because it does not place the full burden on the consumer. Even if someone does not have their documents, they may still be included. If you are missing paperwork, you may want to read Do I need the original finance paperwork to start a complaint? for reassurance.

Calculating Compensation

The FCA is exploring several key factors:

• How the interest rate was set
• Whether the commission created a financial disadvantage
• How much extra interest was paid
• Whether statutory interest should be added
• How to treat repeat agreements
• How to handle cases where the customer no longer has the car

These factors are standard in historic financial redress schemes.

Evidence Requirements

The FCA is expected to define:

• What data lenders must check
• What they must verify internally
• How to handle missing documentation
• How dealerships changing ownership affects evidence
• How customers can challenge incomplete reviews

If you are concerned about dealership closures, see Can I make a claim if the dealership closed down or changed ownership? for more information.

Timeframes

The consultation is expected to set out:

• How long lenders have to review a complaint
• How updates must be given
• When customers can escalate
• How the backlog must be prioritised

This ensures the system progresses without indefinite delays.

How FCA Redress Schemes Usually Work

The FCA has handled scandals of similar scale. Each case has unique elements, but the structure often follows a pattern.

Lessons from PPI

Although PPI is different from car finance, both involve widespread non-disclosure. PPI taught the FCA that large-scale schemes require:

• A consistent calculation method
• Proactive outreach
• Oversight to prevent unfair decisions
• The ability to operate at scale
• Similar principles that will inform the FCA car finance scheme.

Payday Lending Redress

In these cases, lenders were required to:

• Review all loans
• Identify affordability failures
• Apply a formula to calculate refunds
• Contact affected customers

The FCA is likely to use similar mechanics when reviewing discretionary commission models.

Interest Rate Hedging Scheme

This involved complex financial contracts and required detailed evidence checks. It developed a structured, multi-step review system that the FCA may adapt for FCA car finance claims.

What Consumers May Experience Once the Scheme Begins

Based on how the FCA usually runs these programmes, consumers may see several features once the scheme opens in 2026.

Proactive Contact from Lenders

If a review identifies a problem, lenders may contact consumers directly. This is common in large-scale schemes where firms already have the relevant data.

Structured Letters and Templates

Expect outcome letters written in a standard format so customers receive clear, consistent information.

Queue-Based Processing

Cases will be reviewed in the order they were received. If you have not yet complained, being early matters.

Automatic Reviews

PCP claims involving discretionary commission models may be assessed in automated batches. These are often the simplest claims because the commission structure itself is the problem.

How Early Complaints Feed Into the FCA Scheme

Submitting a car finance claim now is not a wasted step. It protects your place in the system and gives you a practical advantage.

Here is why submitting early matters.

Your complaint is timestamped

Lenders must record the date your complaint was received. This secures your place in the queue.

Eligibility is protected

Your complaint becomes active even while lenders cannot issue final decisions.

Waiting creates delays

A huge surge is expected once the FCA publishes final rules in early 2026. Complaints filed now will be ahead of that surge.

Evidence is easier to gather now

Emails, documentation, bank statements, and memories are easier to find today than after several more years.

The FCA scheme will pull your complaint into the system automatically

There is no need to start over or submit new forms. To understand more about complaining during the pause, see Can I still make a PCP complaint while lenders are paused?

What the Scheme Will Not Do

Several fears are circulating online. A structured scheme will not:

• Delete existing complaints
• Force consumers to start again
• Prioritise new complaints over older ones
• Ignore complaints submitted during the pause

The pause affects decisions, not the right to complain.

Example Scenarios

Here are realistic examples based on the structure of past FCA schemes.

You complained in 2024

Your case sits near the front of the queue. Once the FCA publishes the rules, your review begins early.

You complain now in late 2025

Your complaint is logged before the scheme opens and the surge begins.

You wait until mid-2026

Your complaint joins one of the largest queues the FCA has ever overseen. Your wait could stretch into 2027 or beyond.

You had several car finance agreements

Each agreement is reviewed separately. The scheme will outline how refunds work for customers who changed cars multiple times.

Frequently Asked Questions

Will everyone receive the same refund?

No. Refund amounts depend on the facts of each agreement, the interest structure, and whether undisclosed commissions influenced the rate.

Do I need to submit a new complaint when the scheme launches?

No. Existing complaints feed into the scheme automatically.

What if my lender disagrees with my complaint?

The FCA will provide a dispute route. Customers can escalate to the Financial Ombudsman Service if needed.

What if I bought my car through a broker?

You may still be eligible. For more details, read Can I claim PCP compensation if I bought my car through a broker, not a dealership?

Where can I follow the investigation?

You can read the latest updates on the car finance scandal for ongoing developments.

Conclusion

A structured FCA car finance redress scheme is coming. The consultation taking place until December 2025 is shaping the final rules that will govern every FCA car finance claim submitted during the car finance scandal. The rules will define eligibility, evidence checks, calculation methods, escalation steps, and how lenders must work through the backlog.

No one can promise exact refund amounts or say precisely when payments will be made, but the FCA has made the direction of travel clear. The aim is to replace the uncertainty that drivers have faced since 2024 with a single, consistent and transparent process that every lender must follow.

Submitting your car finance claim or PCP claim now puts you in a stronger position for when that process begins. It secures your eligibility, fixes your complaint date in the system, and makes sure your case is already waiting in the queue when lenders start reviewing files in early 2026.

If you want help checking whether your agreement may have involved mis-sold car finance, Reclaim247 offers a free eligibility checker that can help you understand your position while the FCA continues developing the scheme.

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References:

1. FCA to design a structured redress scheme - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
2. The consultation continues until 12 December 2025 - https://www.fca.org.uk/news/statements/motor-finance-compensation-scheme-consultation-progress-and-timing
3. FCA car finance scheme - https://www.fca.org.uk/publications/consultation-papers/cp25-27-motor-finance-consumer-redress-scheme 
4. redress scheme - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme