Less Than One Year Until Key Car Finance Claims Deadline
News 7 September 2026 |  | Andrew Franks |
Consumers who are not contacted by their lender have until 31 August 2027 to complain if they want their agreement considered under the scheme.
The deadline relates to certain motor finance agreements entered into between 6 April 2007 and 1 November 2024.
It is important to distinguish this from a universal deadline applying to every mis-sold car finance claim. The 31 August 2027 date is particularly relevant to consumers who believe they may qualify but have not been contacted by their lender.
Why 31 August 2027 Matters
The FCA car finance compensation scheme places responsibility on lenders to identify customers who may be owed redress.
Where a lender identifies an agreement that could qualify, it is expected to contact the customer and explain what happens next.
However, some consumers may not be identified or contacted.
The FCA has therefore provided a final route for motorists who believe they have an eligible agreement but have not received an invitation from their lender.
Those consumers have until 31 August 2027 to complain and ask for their agreement to be considered.
With September 2026 marking the beginning of the final year, motorists now have less than 12 months to check whether they may need to take action.
Who Could Potentially Qualify?
The Motor Finance Compensation Scheme covers certain agreements entered into between 2007 and 2024.
The scheme focuses on historic commission arrangements and other commercial relationships that the FCA considers may have created unfair outcomes for consumers.
One major area involves discretionary commission arrangements.
Under these historic arrangements, dealers or brokers could sometimes influence the interest rate charged to the consumer in a way that affected the commission they earned.
The FCA banned discretionary commission arrangements in 2021 [2].
However, not every finance agreement from the relevant period qualifies for car finance compensation.
Eligibility depends on the circumstances of the individual agreement.
Does the Deadline Apply to PCP Claims?
Potentially.
Personal Contract Purchase agreements can fall within the compensation scheme where the applicable criteria are met.
Someone with an eligible historic agreement may therefore have what is commonly described as a PCP claim.
However, simply having used PCP car finance does not establish that an agreement was unfair.
Consumers considering PCP claims or a PCP refund should therefore focus on how the original finance was arranged rather than assuming every PCP agreement qualifies.
The same applies to wider PCP finance claims connected to historic commission practices.
How Much Could Consumers Receive?
The FCA estimates that approximately 12.1 million agreements could qualify for redress [3].
At a 75% participation rate, around £7.5 billion could be returned to consumers.
Average compensation is estimated at approximately £829 per eligible agreement [4].
That figure should not be treated as a guaranteed car finance refund.
Individual payments may be higher or lower depending on the agreement and the compensation methodology applied.
Consumers with more than one eligible agreement could potentially receive redress for multiple agreements.
What If You Cannot Find Your Old Finance Agreement?
Losing the original paperwork does not necessarily prevent someone from checking an older agreement.
Useful information can include the vehicle registration, approximate purchase date, dealership details, old bank statements and previous correspondence from the finance provider.
Credit records may also help identify an old lender.
The FCA maintains guidance for consumers trying to establish which lender provided their historic motor finance.
A car finance refund check or PCP claim check should therefore begin with identifying the agreement and lender rather than assuming compensation is due.
Should You Wait for Your Lender to Contact You?
You do not have to.
Consumers who are concerned about an historic agreement can complain directly to their lender for free.
The FCA provides information and complaint guidance for motorists who want to handle the process themselves.
Some consumers may prefer to use an FCA regulated claims management company or seek independent legal advice if they want professional assistance.
Using representation is optional.
Whichever route someone chooses, they should avoid submitting duplicate complaints through several representatives.
What If You Have Already Complained?
Consumers who have already made a complaint generally do not need to submit the same complaint again simply because the 31 August 2027 deadline is approaching.
Their lender should already have a record of the complaint.
Keeping the acknowledgement and any subsequent correspondence is important.
The scheme contains different processes depending on when the finance agreement began and when the complaint was submitted.
Legal Challenges Have Delayed the Compensation Timetable
The approaching deadline comes while parts of the scheme remain suspended.
The Tribunal partially suspended parts of the programme in July [6] while those challenges proceed.
This means lenders do not currently need to calculate or pay compensation under the affected provisions.
However, the scheme has not been cancelled.
Consumers can still complain, and lenders must continue complying with rules that remain in force.
Claim Deadline and Payment Date Are Different
The distinction between the complaint deadline and compensation timetable is important.
Legal proceedings have delayed when some compensation payments can begin.
They have not automatically changed the 31 August 2027 complaint deadline.
Unless the FCA announces otherwise, motorists who are not contacted and believe they have eligible car finance claims should work on the basis that the existing deadline remains in force.
Waiting for certainty over payment dates could therefore create unnecessary risk if someone only discovers an old agreement after the deadline.
Less Than a Year to Check Historic Agreements
The remaining year gives motorists time to identify old lenders, check whether they have previously complained and establish whether an agreement could fall within the scheme.
There is no guarantee that submitting a complaint will result in compensation.
Not every agreement entered into between 2007 and 2024 involved car finance mis-selling.
However, motorists who believe they may have been mis-sold in relation to the wider car finance scandal should not assume that their lender will necessarily identify and contact them.
For consumers who are not contacted, 31 August 2027 remains the key date to remember.
_________
References:
- Motorists who believe they may have been affected by historic motor finance commission arrangements now have less than one year until an important deadline under the Financial Conduct Authority’s Motor Finance Compensation Scheme - https://allthingsbusiness.co.uk/1-year-until-the-car-finance-claims-deadline-ends/
- The FCA banned discretionary commission arrangements in 2021 - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models
- The FCA estimates that approximately 12.1 million agreements could qualify for redress - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- Average compensation is estimated at approximately £829 per eligible agreement - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- Consumer Voice, Volkswagen Financial Services, Mercedes Benz Financial Services and CA Auto Finance UK are challenging the scheme before the Upper Tribunal - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
- The Tribunal partially suspended parts of the programme in July - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended