Updated: 15 April 2026

Originally Published: 19 March 2025

If you financed a car through Black Horse, you are likely only asking one clear question. Can I claim against Black Horse Finance in 2026?

The answer is yes for a significant number of drivers across the UK. What matters now is understanding how the FCA redress scheme works, how your agreement fits into it, and what you should realistically expect from a claim.

The Financial Conduct Authority has now confirmed a nationwide compensation scheme covering agreements taken out between 2007 and 2024 [1]. This includes millions of agreements across the UK, many of which involve Black Horse.

This is not a small or isolated issue. The FCA estimates that around twelve million agreements could fall within scope, with total compensation across the market expected to reach around £7.5 billion [2].

That scale changes how these claims should be understood. This is no longer about individual complaints. It is a structured, industry-wide redress process.

This guide explains how a Black Horse car finance claim works in full. It covers eligibility, compensation, timelines, and how to decide whether to take action.

Why Black Horse is central to the car finance scandal

Black Horse is one of the largest motor finance providers in the UK. It sits within Lloyds Banking Group and has financed vehicles for millions of customers over the past two decades.

Because of this scale, it is heavily exposed to the FCA’s investigation into mis-sold car finance.

Lloyds Banking Group has already set aside around £1.95 billion in provisions to deal with potential compensation claims [3]. This is one of the largest financial provisions made by any UK lender in response to the scandal.

A provision reflects expected liability. It indicates that lenders anticipate a high volume of claims resulting in compensation.

When combined with the FCA’s estimate of £7.5 billion in total market redress, it becomes clear that this is one of the largest consumer financial correction exercises in recent UK history.

How big is the car finance compensation scheme?

One of the most important updates from the FCA is the confirmed scale of the redress scheme.

This is not a small or niche issue. It is one of the largest financial compensation exercises ever seen in the UK consumer market.

The FCA now estimates:

• Around 12.1 million agreements are eligible for review
• Total redress is expected to reach £7.5 billion
• The total cost to lenders, including admin and operational costs, is around £9.1 billion

These figures are based on an estimated 75 percent customer participation rate, meaning not everyone eligible is expected to claim.

Why the number of eligible agreements has changed

Earlier estimates suggested around 14.2 million agreements could be included.

The final FCA car finance policy has reduced this to 12.1 million.

This does not mean fewer people were affected. It reflects tighter eligibility rules introduced to make the scheme more proportionate.

In practice, this means:

• Some low value / borderline cases have been removed
• Agreements where there is a more obvious risk of unfairness remain
• Overall the scheme is more targeted and easier for lenders to administer

For consumers, this provides greater certainty. It reduces the risk of anomalous outcomes and focuses redress where there is material financial detriment due to car finance mis-selling.

What the £7.5 billion redress figure actually means

The £7.5 billion figure is often misinterpreted.

It does not mean that every eligible customer is getting compensated, and it does not mean the payouts are set in stone.

It is an average amount across all successful claims.

In basic terms:

• Some customers will receive no payout
• Many will get middling sums based on the interest rate difference
• Fewer will get higher payouts where commission was earned

This is why the average payouts 2026 sits at around £829, even though the total scheme value runs into billions.

Why the total cost to lenders is higher than redress

The FCA also estimates that the total cost to firms will reach around £9.1 billion.

This includes:

• Compensation payments to customers
• Administrative costs of reviewing millions of agreements
• Operational costs of running the scheme
• Customer communication and support

This matters because it explains why lenders like Black Horse are preparing for a long and resource intensive process.

It also reinforces that this is a structured and funded scheme, not an uncertain or informal claims process.

What this means for your Black Horse claim

For individual customers, these large numbers can feel abstract. What matters is how they translate to your situation.

The most important thing to take away from the above is this:

• It’s big enough that there are genuine claims to pay out on
• It’s a process, not a discretionary scheme
• Lenders have the funds to pay eligible customers back

However:

• Not all agreements will be eligible
• Not all claims will be paid
• Any pay out will be commensurate with financial loss, it’s not a flat rate

This is a good balance. It manages expectations but also solidifies the fact that many customers do have genuine claims.

What went wrong with Black Horse car finance?

To give you a sense of whether or not you could be owed a Black Horse refund, it is helpful to understand what went wrong with these agreements.

Predating 2021, a lot of car finance agreements were based on commission structures that customers were kept in the dark over.

In practice, this often resulted in:

• Dealers had a say in what interest rate you received
• The size of their commission varied based on that rate
• Not being fully transparent to you about how this impacted your payments
• Creating a conflict of interest.

A higher interest rate may have provided the dealer with a greater incentive, even when a lower rate may have been available to you.

The FCA later concluded that in many cases, customers were not given enough information to understand how their agreement was priced. That lack of transparency is the foundation of most car finance claims today.

What counts as mis-sold car finance?

Mis-sold car finance is not a single issue. It covers a range of practices that may have affected the fairness of your agreement.

The FCA has identified three main types of mis-selling.

Discretionary commission arrangements

This is the most common issue and affects a large proportion of PCP claims.

Dealers were allowed to adjust the interest rate within a permitted range. Increasing the rate increased their commission.

Most customers were not told:

• That the dealer had control over the rate
• That a lower rate may have been available
• That the dealer’s earnings depended on the rate

This lack of transparency is now central to many Black Horse car finance claims or a PCP refund.

High commission arrangements

Some agreements involved unusually high commission payments.

The FCA defines this as:

• 39 percent or more of the total cost of credit
• At least 10 percent of the loan amount

These cases often lead to higher compensation because the financial impact on the customer is greater.

Contractual links and a restricted choice of lenders

In some cases, the dealers had preferred arrangements with particular lenders, for example, Black Horse.

If you were steered towards a particular lender and were not informed that there was a choice, this could have affected your decision.

The key issue is whether you were given enough information to make an informed choice.

A practical example: How commission could have increased your costs

To understand how this may have affected you, consider a simple example.

• Loan amount: £25,000
• Term: 48 months
• Fair interest rate: 5 percent
• Rate offered: 7 percent

That 2 percent might not appear to be much of a difference. But over the life of the contract, it will equate to a considerably higher amount of interest.

If that extra interest was added to cover commission and was not made clear, it could provide grounds for a Black Horse finance claim.

This is why seemingly minor differences in interest rates can equate to a real financial difference.

Who is eligible for a Black Horse finance claim?

Eligibility is often broader than people expect.

You may be eligible if your experience included:

• No clear explanation of commission
• An interest rate that seemed higher than expected
• Limited or no comparison of alternative lenders
• A lack of transparency about how the deal was structured

You do not need to identify the exact issue yourself. The FCA scheme is designed so that lenders assess this as part of their review.

When a claim may be less likely to succeed

Some agreements are less likely to result in compensation.

This includes:

• Very low commission levels below FCA thresholds
• Agreements with no interest charged
• Cases where the lender can show no financial disadvantage
• Claims already fully resolved through legal or Ombudsman decisions

These factors reduce the likelihood of a successful outcome, but they do not automatically prevent a claim.

How to start a Black Horse finance claim

The process is more straightforward than many people expect, especially now that the FCA scheme is in place.

Step 1. Complete a car finance refund check

A car finance refund check is the simplest way to assess your position.

It allows you to confirm:

• Whether your agreement falls within the FCA scheme
• Whether it shows indicators of mis-selling
• Whether it is worth proceeding

Many people complete this online using a finance claims expert such as Reclaim247. This allows you to check eligibility quickly using basic details, even if you do not have full paperwork.

Step 2. Submit your claim

You can submit a claim directly to the lender or choose support.

The lender will review your agreement using FCA rules.

Step 3. Receive your outcome

You will receive a formal decision explaining:

• Whether your agreement qualifies
• Whether compensation is due
• How it has been calculated

What happens after you submit a claim?

Once your claim is submitted, the process becomes largely administrative.

The lender will:

• Retrieve your agreement details
• Assess commission and disclosure
• Apply FCA rules to determine fairness
• Calculate compensation if applicable

You do not need to calculate or argue these points yourself.

If you disagree with the outcome, you can escalate the case to the Financial Ombudsman Service.

What if you do not have your paperwork?

This is one of the most common concerns and often stops people from taking action.

You can still proceed without your original documents.

Lenders are required to retain records and can usually provide:

• Your agreement
• Payment history
• Interest rate details

In most cases, basic information such as your name, approximate date, and vehicle is enough to begin.

FCA car finance redress scheme explained

The FCA scheme introduces a consistent approach across the entire market.

This ensures:

• Similar cases are treated in a similar way
• Compensation is calculated using a standard method
• Customers are treated fairly regardless of lender

The scheme also introduces clear timelines and expectations, which reduces uncertainty for consumers.

Scheme 1 and Scheme 2. What is the difference?

Scheme 1

Agreements from 2007 to March 2014

• Implementation ends 31 August 2026
• Decision within 3 months
• Payment typically within one month

Average payout: £734

Scheme 2

Agreements from April 2014 to November 2024

• Implementation ends 30 June 2026
• Decision by September 2026
• Payment typically within one month

Average payout: £881

How much Black Horse compensation could you receive?

Average payouts

• Around £829 per agreement

By type of mis-selling

• Discretionary commission cases: around £810
• Contractual ties: around £807
• High commission cases: around £1,203

Why compensation is not a full refund

Compensation does not cover everything you spent.

Rather, it puts you back in the position you should have been in, had the contract been fair.

Which means:

• You get the difference between actual and fair costs
• Interest is applied to account for time

This is done to both be fair to you and not to overcompensate you.

How long does a PCP claim take?

If you submit your claim before deadlines:

• Decisions are expected in late 2026
• Payments typically follow shortly after

If you wait:

• The lender may contact you
• The process may take longer
• Payments may extend into 2027 or beyond

How long does car finance claims take to pay out?

Once approved:

• Some payments arrive within weeks
• Most are paid within one month
• Complex cases may take longer

Should you use a finance claims expert?

You can submit a claim yourself at no cost.

You can also go through the Financial Ombudsman.

Some people choose to use a finance claims expert to:

• Carry out a car finance refund check
• Manage communication
• Reduce effort

This does not affect your eligibility or compensation.

Why acting now matters

You are not required to act immediately. However, there are clear advantages to starting early.

Submitting a claim now can:

• Lead to faster processing
• Give you more control
• Reduce reliance on lender outreach

Waiting may still result in car finance compensation, but the timeline may be longer.

Can I make a Black Horse finance claim for a deceased person?

Yes. The FCA car finance scheme rules say the finance rules apply even if the customer has died, so their estate may be able to claim compensation.

If you are an executor or beneficiary you can make the claim on their behalf. Use your own personal details but make it clear you are claiming on behalf of the deceased person, with their name and address and any finance details you have.

The lender may need you to provide a will and/or grant of probate to evidence your authority to claim on their behalf before any compensation is paid.

Frequently Asked Questions

Can I claim against Black Horse Finance if my agreement has ended?

Yes. Eligibility is based on how the agreement was structured.

How much will I get back from a Black Horse refund? 

£829 on average, but it varies. 

How long do Black Horse PCP claims take? 

Most are expected to complete from late 2026 to early 2027. 

Do I need any paperwork? 

Not necessarily - lenders are expected to be able to provide records. 

Is it better to make a claim now, or should I wait? 

It should be quicker to get a decision if you apply earlier.

Final thoughts

The biggest shift in 2026 is clarity.

Car finance claims are now governed by a structured FCA framework with clear rules, timelines, and outcomes.

Black Horse is one of the most exposed lenders in this process, which means a large number of customers may now be eligible for compensation.

If you are unsure, the next step is simple.

Start with a car finance refund check.

Understand your position.

Decide what to do next.

__________

References:

1. The Financial Conduct Authority has now confirmed a nationwide compensation scheme covering agreements taken out between 2007 and 2024 - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. The FCA estimates that around twelve million agreements could fall within scope, with total compensation across the market expected to reach around £7.5 billion - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. Lloyds Banking Group has already set aside around £1.95 billion in provisions to deal with potential compensation claims - https://cardealermagazine.co.uk/lloyds-sticking-with-1-95-billion-provision-for-handling-motor-finance-compensation-claims/323366