Updated: 12 August 2026
Originally Published: 23 March 2025
Quick Answer
If you're wondering "Is MotoNovo Finance refunding?", the answer is not automatically.
MotoNovo is one of the lenders named in the FCA's proposed motor finance compensation scheme, following concerns about historic commission arrangements in some motor finance agreements. You may be due a MotoNovo finance refund, depending on the terms of your agreement and whether it is within the scope of the FCA's proposed redress scheme.
Although compensation payments are expected to take longer than originally planned because of ongoing legal challenges, you can still complete a car finance refund check to find out whether your agreement may be eligible.
MotoNovo Refunds at a Glance
- Is MotoNovo refunding?: Not automatically. Eligible customers may receive compensation under the FCA's proposed scheme.
- Who could be affected?: Drivers with eligible personal-use finance agreements entered into between 6 April 2007 and 1 November 2024.
- Average FCA compensation: Around £829 per eligible agreement across the proposed scheme.
- FirstRand provision: Around £750 million set aside to cover potential compensation liabilities.
- Current position: The FCA's compensation scheme remains subject to legal challenges, although motorists can still begin car finance claims.
- Expected payments: The original payouts 2026 timetable has slipped, with compensation now expected during 2027, subject to the outcome of the Upper Tribunal proceedings.
- Current deadline: 31 August 2027
Introduction
For many drivers, a MotoNovo finance agreement was simply another step towards buying a car.
Once the paperwork was signed and the monthly payments began, few people gave much thought to how the finance had been arranged. In many cases, the agreement was paid off years ago and quietly forgotten.
That has changed.
As the UK's car finance scandal has unfolded, more former and existing MotoNovo customers have started looking back at agreements they once assumed were straightforward. Some want to know whether they were charged a fair interest rate. Others are asking whether commission influenced the cost of their finance or whether they could now be entitled to car finance compensation.
MotoNovo has attracted particular attention because of developments involving its parent company, FirstRand, which has set aside around £750 million for potential compensation liabilities and announced plans to leave the UK motor finance market [1]. While that doesn't mean every customer will receive a refund, it highlights just how significant the FCA's proposed compensation scheme has become.
This guide explains why so many people are asking whether MotoNovo Finance is refunding, what the latest FCA developments mean, how refunds are assessed and what you should know if you're considering a car finance claim.
If you're still trying to establish whether your agreement could qualify, our guide to Understanding MotoNovo Finance Claims explains the eligibility criteria, the FCA's proposed scheme and who may be able to claim.
Why Are So Many People Asking If MotoNovo Is Refunding?
The growing interest isn't because MotoNovo has started issuing automatic refunds. Instead, it's a reflection of increasing public awareness of the wider car finance mis-selling investigation and the possibility that some historic agreements may have cost customers more than they realised.
As news of the FCA's proposals has spread, many drivers have begun revisiting finance agreements they signed years ago. Some are trying to remember which lender they used, while others are asking questions like "Did MotoNovo overcharge?" or whether mis-sold car finance MotoNovo agreements are now being reviewed.
The answer depends on the individual agreement.
Not every customer will be entitled to compensation, and not every MotoNovo agreement falls within the FCA's proposed redress scheme. Where an agreement does qualify, however, any car finance refund will be based on the specific circumstances of that finance agreement rather than a standard payment offered to every customer.
Why Has MotoNovo Been in the Spotlight?
MotoNovo isn't the only lender affected by the car finance scandal, but it has become one of the names most frequently associated with the FCA's proposed compensation scheme.
Part of the reason is its parent company, FirstRand.
Earlier this year, FirstRand announced plans to withdraw from the UK motor finance market after setting aside around £750 million to cover potential liabilities linked to the FCA's proposed redress scheme. That announcement attracted significant attention because it highlighted the financial impact the investigation could have on lenders across the industry.
For customers, however, it's important to separate the headlines from what they actually mean.
FirstRand's decision to leave the market doesn't mean MotoNovo customers are automatically entitled to a refund, nor does it affect existing finance agreements or the ability to pursue a car finance claim. Instead, it reflects the scale of the industry's preparations as lenders continue reviewing agreements that could fall within the FCA's proposed compensation scheme.
In other words, the story isn't that MotoNovo has admitted every agreement was unfair. It's that the lender, like many others, is preparing for the possibility that some customers may be entitled to car finance compensation following the FCA's review.
Why Are Some MotoNovo Agreements Being Reviewed?
The FCA's investigation wasn't about whether customers could afford their monthly repayments or whether they were happy with the vehicle they purchased.
Instead, it focused on whether some finance agreements were arranged in a way that may have increased the overall cost of borrowing without customers fully understanding why.
One of the key areas under review is whether commission arrangements influenced the interest rate offered to the customer.
This is why questions such as "Did MotoNovo use discretionary commission?" and "Did MotoNovo overcharge?" have become so common.
Prior to January 2021, a number of lenders, including MotoNovo, had operated under a system that allowed discretionary commission arrangements (DCAs). With this system, dealers could on occasion select the interest rate offered to a customer, up to a cap set by the lender. In certain circumstances, offering a higher rate of interest to the customer led to a higher commission payment to the dealership.
It does not mean that every MotoNovo agreement was subject to discretionary commission. Nor does it mean that every agreement meant that customers overpaid. Individual consideration still has to be made on each case.
Alongside discretionary commission, the FCA is also reviewing other historic commission arrangements and sales practices where customers may not have received enough information to make an informed decision about their finance agreement.
Does This Mean MotoNovo Overcharged Customers?
Not necessarily.
It's possible that some people did pay more than they should have. But whether that was the case will depend on the circumstances of the individual agreement. The type of commission arrangement used, the interest rate applied and the information shared during the sales process are all things that can affect whether or not an individual is due compensation.
This is why the FCA's proposed scheme does not assume all customers were treated unfairly, and each agreement must be assessed on its individual merits to identify if a quantifiable financial loss has occurred to the customer.
What Could a MotoNovo Finance Refund Include?
If your agreement qualifies under the FCA's proposed compensation scheme, a MotoNovo finance refund isn't likely to be a fixed payment offered to every customer.
Instead, any car finance compensation is intended to reflect the financial impact of the agreement itself.
The FCA's proposed redress scheme is based on whether a customer has overpaid as a result of how their finance was arranged. It is not a blanket approach with each eligible agreement being assessed on its own merits.
Depending on the circumstances, compensation could include:
- a refund of excess interest paid over the life of the agreement
- repayment of commission-related overpayments where applicable
- additional interest applied under the FCA's proposed scheme
This means two customers who financed similar vehicles through MotoNovo could receive very different outcomes.
The FCA estimated that eligible motorists will be able to receive about £829 each in average across all lenders taking part in the scheme [3]. However, that is just an average figure to show how much the scheme could give back in total. Lower figures will be paid in some successful car finance claims, but there are also likely to be significantly higher awards, depending on the terms of an agreement and the financial impact on a customer.
Some motorists are hoping for a full refund of every payment they made. In reality, the FCA's proposed scheme isn't designed to cancel every finance agreement. Instead, it aims to put eligible customers back in the position they may have been in had the finance been arranged fairly.
Why FirstRand's £750 Million Provision Matters
One of the biggest developments for MotoNovo customers didn't come from the FCA itself. It came from MotoNovo's parent company, FirstRand.
FirstRand announced that it had provisioned approximately £750 million for the expected motor finance compensation costs following confirmation by the FCA of its proposed compensation scheme. This was around the same time that it also confirmed that it intended to withdraw from the UK motor finance market. These announcements led to understandable questions from customers as to whether MotoNovo had already accepted responsibility and were about to make refunds automatically.
Neither is the case.
Setting aside money for potential compensation is an accounting decision rather than an admission that every agreement was unfair. It allows a business to prepare financially while eligible agreements are reviewed under the FCA's proposed scheme.
What the provision does show is the potential scale of the review. Rather than indicating how much any individual customer will receive, the provision shows that FirstRand expects the review of historic agreements to be a significant exercise. It's one reason MotoNovo continues to feature prominently in discussions about the wider car finance compensation scheme.
Are PCP Agreements More Likely to Receive a Refund?
Many motorists assume that because PCP claims feature so prominently in the media, every Personal Contract Purchase agreement is more likely to qualify for compensation.
That's not necessarily true.
There isn't a separate FCA compensation scheme for PCP finance claims. Whether an agreement was arranged as PCP car finance or Hire Purchase, the same principles are used to decide whether compensation may be payable.
So why do PCP agreements receive so much attention?
It's largely because of how they're structured.
Lower monthly payments, a final balloon payment and longer repayment periods can mean that any difference in the interest charged has a greater impact over the life of the agreement. As a result, some successful PCP refund cases may receive more compensation than others, but that depends entirely on the individual agreement.
If you think you may have mis-sold PCP car finance, don't worry if you no longer have your paperwork. Many motorists are surprised to discover they can still find my car finance agreements through lender records, credit reference agencies or by completing a PCP compensation claim check or car finance refund check.
If you're ready to understand the next steps, our guide to How to Claim Against MotoNovo Finance explains how to find old car finance agreements, what information you'll need and how the claims process works.
What Happens Next for MotoNovo Customers?
If you've been following news about the car finance scandal, you may have expected compensation payments to begin sooner.
However, the timetable has changed.
Although the FCA published its final motor finance compensation scheme earlier this year [4], implementation has been affected by ongoing legal challenges brought by several lenders. While those proceedings continue, parts of the scheme have been temporarily suspended as the Upper Tribunal considers the issues raised [5].
For MotoNovo customers, this means one thing.
The original payouts 2026 timeline is no longer expected to happen. Instead, compensation payments are now widely expected to begin during 2027, although the exact timing will depend on the outcome of the legal process and any further announcements from the FCA.
Importantly, the delay isn't specific to MotoNovo. It affects the wider FCA car finance compensation scheme and applies to other lenders included in the proposed redress programme.
Although payments may take longer than first anticipated, work on preparing the scheme continues, and motorists can still check whether their agreement may qualify.
Should You Wait Before Checking Your Agreement?
Waiting is unlikely to offer any advantage.
Whether your agreement relates to PCP car finance or another type of regulated motor finance, checking your eligibility now can give you a clearer understanding of where you stand while the compensation scheme continues to progress.
Many people assume they can't do anything because they no longer have their paperwork. In reality, that's very common.
If you've changed vehicles, moved home or settled your finance years ago, you may still be able to find my car finance agreements using your credit report, lender records or historic banking information. Even without the original documents, it's often possible to begin a car finance refund check or PCP claim check.
If you'd like to understand the process in more detail, our guide to How to Claim Against MotoNovo Finance explains how to find old car finance agreements, what information you'll need and what happens after you submit a claim.
Even if you're not ready to pursue a claim immediately, knowing whether your agreement could fall within the FCA's proposed scheme can help you make an informed decision later.
Frequently Asked Questions
Is MotoNovo Finance refunding everyone?
No. MotoNovo isn't issuing automatic refunds. Each agreement is assessed individually under the FCA's proposed compensation scheme to determine whether the customer may be entitled to compensation.
Why has MotoNovo been mentioned so many times in the car finance scandal?
MotoNovo has been in the spotlight because its parent company FirstRand has put aside approximately £750 million to cover expected liabilities arising from the FCA's proposed compensation scheme and has also said that it will be leaving the UK motor finance market. Although these are big steps, it does not mean that every customer will be eligible for a payout.
Did MotoNovo use discretionary commission?
MotoNovo, like many lenders operating before January 2021, worked within a system that included discretionary commission arrangements. Whether this affected your agreement depends on the individual circumstances of your finance.
Were customers overcharged by MotoNovo?
It is possible that some agreements have cost customers more than they otherwise would have done, if commission arrangements impacted the interest rate and were not clearly explained. This was not the case with every agreement which is why all cases are investigated on an individual basis.
How much would I get back from MotoNovo finance refund?
There’s no set figure as this will depend on each claim. The FCA’s estimate is that the average person could get around £829 back across all lenders that are covered by the scheme. However, individual car finance claims will vary depending on what each agreement contained.
Will all PCP claims be eligible?
No. If you have PCP car finance you will not automatically be eligible for a refund. PCP car claims will be considered on a case-by-case basis by the FCA if its proposed scheme comes into effect.
Can I still check if I'm eligible?
Yes. Even though compensation payments are expected to take longer than originally planned, you can still complete a car finance refund check to establish whether your agreement may fall within the scope of the FCA's proposed scheme.
Final Thoughts
MotoNovo's involvement in the FCA's proposed compensation scheme has prompted many motorists to revisit finance agreements they haven't thought about for years.
While headlines about FirstRand's market exit and the wider car finance scandal have raised awareness, they don't automatically mean every customer will receive a refund. Whether you're entitled to car finance compensation depends on your individual agreement and how it was arranged.
If you think you may have been affected by mis-sold car finance or mis-sold PCP car finance, checking your agreement now can help you understand whether it falls within the FCA's proposed scheme. While the legal process continues, understanding whether your agreement could fall within the FCA's proposed scheme means you'll be better prepared when the next stage of the compensation process begins.
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References:
- FirstRand, which has set aside around £750 million for potential compensation liabilities and announced plans to leave the UK motor finance market - https://www.autofinancenews.net/allposts/risk-management/firstrand-to-exit-uk-as-car-loan-charges-hit-750m/?ki-cf-botcl=1
- Discretionary commission arrangements were later prohibited by the FCA due to the concern of a conflict of interest between dealer and customer - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models
- The FCA estimated that eligible motorists will be able to receive about £829 each in average across all lenders taking part in the scheme - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- the FCA published its final motor finance compensation scheme earlier this year - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- parts of the scheme have been temporarily suspended as the Upper Tribunal considers the issues raised - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended