Updated: 29 July 2026

Originally Published: 19 March 2025

If you entered into a Black Horse Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement you may well be asking yourself whether you are eligible for compensation and should make a claim as part of the continuing UK car finance scandal.

The short answer is that it may still be possible to make a Black Horse finance claim.

However, the claims landscape has changed quite dramatically in recent months. While the Financial Conduct Authority (FCA) has proposed an industry-wide compensation scheme for eligible consumers, legal challenges have delayed compensation payments while the Upper Tribunal considers parts of the regulator's plans.

Although this means widespread payouts are now expected later than originally anticipated, making the chances of payouts 2026 slim, it does not mean the scheme has been cancelled. If you believe your finance agreement may have been affected by car finance mis-selling, you can still review your agreement, check your eligibility and begin the car finance or PCP claims process.

Black Horse, part of Lloyds Banking Group, is one of the UK's largest motor finance providers. Because it financed millions of vehicles over the years, it is expected to play a significant role in the FCA's proposed redress scheme, making it one of the lenders most commonly associated with car finance claims.

Whether you've read the latest FCA car finance update, want to know “Can I claim against Black Horse Finance?” or "how long does a PCP claim take", or are just trying to figure out what the recent legal ruling means for your agreement, this guide will tell you what you need to know.

What You'll Learn

In this guide, we'll explain:

• the latest FCA and Upper Tribunal developments affecting Black Horse finance claims
• why Black Horse is at the centre of the car finance scandal
• what mis-sold car finance means and whether it could apply to your agreement
• who may be eligible to make a Black Horse car finance claim
• how the proposed compensation scheme is expected to work
• why compensation has been delayed and when payments could begin
• where to find more detailed guidance on making a claim and understanding potential compensation

Key Takeaways

• You can still start a Black Horse finance claim, even though compensation payments have been delayed.
• The FCA estimates that around 12.1 million finance agreements could fall within the scope of its proposed redress scheme [1], with approximately £7.5 billion expected to be paid in compensation across the industry.
• Legal challenges have temporarily paused compensation calculations, customer notifications and payments while the Upper Tribunal considers aspects of the FCA's scheme.
• Black Horse remains one of the lenders most closely linked to the car finance scandal because of its significant share of the UK motor finance market.
• You may still be eligible to claim even if you've paid off your agreement, sold the vehicle or no longer have the original paperwork.
• If you're unsure where you stand, a car finance refund check can help determine whether your agreement may fall within the scope of the FCA's proposed compensation scheme.

What's Changed Since Our Last Update?

The FCA car finance investigation has continued to evolve since this guide was last updated. While the Financial Conduct Authority published its final motor finance redress scheme in March 2026 [2], a number of legal challenges have since changed the expected timeline for millions of motorists considering car finance claims or PCP car claims.

When the scheme was announced, many consumers expected car finance compensation to begin before the end of 2026. However, the Upper Tribunal has since granted a partial suspension of parts of the scheme [3] while it considers challenges brought by consumer group (Consumer Voice) [4] and several motor finance providers (Mercedes-Benz Financial Services, Volkswagen Financial Services and Crédit Agricole Auto Finance).

Crucially, this does not signal the end of the road for the proposed compensation scheme. It only means that aspects of its roll-out - including the calculation and payment of compensation - have been delayed pending the outcome of the legal proceedings.

Key Developments

Since our previous update, several important developments have reshaped the position for motorists with historic finance agreements.

• The FCA published its final industry-wide compensation scheme for eligible motor finance customers.
• Around 12.1 million agreements are estimated to fall within the scope of the proposed scheme.
• The regulator estimates that approximately £7.5 billion could be paid in compensation across the industry.
• Consumer groups and several lenders have launched legal challenges against aspects of the FCA's proposals.
• The Upper Tribunal has put the calculation of compensation, and the notification and payment of compensation, on hold pending determination of those challenges. 
• Hearings before the Tribunal are now expected to extend into late 2026 and commentators now generally expect a start to broad-based compensation payments in 2027, depending on the outcome of the Tribunal process.

What This Means for Black Horse Customers

If you're considering a Black Horse finance claim or wondering "how long does car finance claims take to pay out", the latest developments shouldn't discourage you from understanding your options.

You can still review your agreement, gather any available paperwork and explore whether your finance may fall within the FCA's proposed redress scheme. The current delays affect when compensation may be paid, not whether you can begin looking into a potential PCP compensation claim.

Throughout the rest of this guide, we'll explain what these developments mean specifically for Black Horse customers, who may be eligible, and what steps you can take while the FCA's compensation scheme continues to progress.

Why Is Black Horse at the Centre of the Car Finance Scandal?

When people search for Black Horse finance claims, it's often because they've seen the lender mentioned in news reports about the car finance scandal.

That doesn't mean every Black Horse agreement was mis-sold car finance, or that every customer is entitled to compensation. Rather, Black Horse is frequently mentioned because of its size and long-standing presence in the UK motor finance market.

As one of the UK’s biggest vehicle finance providers, Black Horse has arranged finance for millions of motorists to buy cars on a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement. Given the millions of historic agreements they have to review, it’s no surprise they are expected to assess a large volume of cases, as part of the FCA’s proposed compensation scheme.

Black Horse's Role in the Motor Finance Market

Black Horse is the motor finance division of Lloyds Banking Group, one of the UK's largest banking groups.

For many years, Black Horse has worked with dealerships across the UK to provide finance for both new and used vehicles. Its extensive lending means that many customers who are now exploring car finance claims are likely to have financed their vehicle through Black Horse.

The lender's prominence doesn't mean it has been singled out by the FCA. Instead, it reflects the scale of its operations and the number of agreements that could potentially fall within the scope of the proposed redress scheme.

Lloyds Banking Group Has Set Aside Significant Funds

The scale of the issue is reflected in Lloyds Banking Group's financial provision.

The group has set aside around £1.95 billion to cover the potential cost of motor finance compensation [5], including claims involving Black Horse agreements.

It's important to understand what this means.

Setting aside funds is a standard accounting measure and should not be viewed as an admission that every complaint will succeed. Equally, it doesn't mean every Black Horse customer will receive compensation.

Instead, it reflects the group's expectation that a large number of historic agreements may need to be reviewed if the FCA's proposed scheme proceeds.

Why Are So Many Consumers Looking Into Black Horse Finance Claims?

Growing awareness of the FCA investigation has prompted many motorists to revisit finance agreements they signed years ago.

Some are reviewing paperwork they haven't looked at since collecting their vehicle. Others simply want to understand whether the way their finance was arranged could now be relevant.

Common questions include:

• Can I claim against Black Horse Finance?
• Am I eligible for a Black Horse finance claim?
• Could I receive a Black Horse refund?
• How much Black Horse compensation could I receive?

These are reasonable questions, particularly as many people can no longer remember exactly how their finance was explained or whether commission was discussed at the time.

Every Agreement Should Be Considered on Its Own Merits

While Black Horse is one of the lenders most closely associated with the FCA's investigation, it's important not to assume that every agreement was affected.

The regulator's review focuses on whether customers were given enough information to make an informed decision before entering into their finance agreement, particularly around commission arrangements and the way finance products were presented.

Some customers may discover that their agreement falls within the scope of the proposed compensation scheme, while others may find that their finance was arranged fairly.

The key point is that eligibility depends on the individual circumstances of each agreement, not simply on the name of the lender.

What Went Wrong With Some Black Horse Finance Agreements?

One of the biggest misconceptions about the car finance scandal is that it centres on the finance products themselves.

It doesn't.

Personal Contract Purchase (PCP) and Hire Purchase (HP) are legitimate ways to finance a vehicle and continue to be widely used today. The FCA's investigation instead focuses on how some finance agreements were arranged and explained before customers signed them.

The key question is whether consumers were given enough information to make an informed decision.

Commission Wasn't the Issue. Transparency Was.

Many people are surprised to learn that dealerships earning commission from finance providers isn't unusual.

Commission has long been a normal part of the motor finance industry.

The concern is whether customers understood:

• that the dealership would receive commission from the lender
• whether that commission could influence the finance they were offered
• how their interest rate had been determined
• whether alternative finance options were available

Where this information wasn't explained clearly, some customers may not have had all the facts they needed to compare finance products or understand the true cost of borrowing.

Why Discretionary Commission Arrangements Matter

A major focus of the FCA's investigation is the use of Discretionary Commission Arrangements (DCAs).

Before they were banned in January 2021 [6], some lenders allowed dealerships to adjust a customer's interest rate within an agreed range.

In certain cases, a higher interest rate meant the dealership earned more commission.

The FCA concluded that these arrangements created a conflict of interest because there was an incentive to charge some customers more than they might otherwise have paid.

It's important to remember that not every Black Horse agreement involved a discretionary commission arrangement, and not every agreement affected by the FCA's review will result in compensation.

A Simple Example

Imagine two customers buying the same car from the same dealership.

Both have similar financial circumstances and borrow the same amount over the same term.

If one customer is offered a higher interest rate because it increases the dealer's commission, but isn't told that commission influenced the deal, they may end up paying more without understanding why.

Situations like this are one of the reasons the FCA began investigating historic motor finance agreements.

Does This Mean Your Agreement Was Mis-Sold?

Not necessarily.

Every agreement must be assessed on its own facts.

Some customers may discover their finance was arranged fairly and that they have no grounds for a claim. Others may find there are questions about how their agreement was explained or whether important information was disclosed before they signed.

If you're unsure, the next step is simply to understand whether your agreement could fall within the FCA's proposed compensation scheme.

You don't need to decide whether your agreement was mis-sold car finance on your own. You can seek the help of a finance claims expert for an eligibility check. The purpose of a claim or eligibility check is to review the available information and establish whether there are grounds for further investigation.

Can I Claim Against Black Horse Finance?

You may be able to make a Black Horse finance claim if your agreement falls within the scope of the FCA's proposed compensation scheme and there are concerns about how your finance was arranged or explained.

The FCA has not said that every Black Horse customer is entitled to compensation. Instead, each agreement will be assessed individually based on its own circumstances.

While eligibility depends on the facts of your agreement, you may wish to explore a claim if:

• you took out a Black Horse PCP or Hire Purchase (HP) agreement during the period covered by the FCA's proposed scheme
• you weren't clearly told that the dealership would receive commission
• you didn't understand how your interest rate had been set
• you don't believe you were given enough information to make an informed decision before signing the agreement

Importantly, you may still be eligible even if:

• you've paid off your finance
• you've sold or traded in the vehicle
• you no longer have the original paperwork
• the dealership has since closed

Many motorists only begin reviewing agreements years after buying their vehicle, so it's common not to have every document or remember every conversation.

If you're unsure where you stand, a car finance refund check or PCP claim check can help determine whether your agreement may be worth investigating further.

You may be asking if you can "refund my PCP." The borrower is meant to be refunded what they overpaid, leaving them in the position they would have been in if they weren't overcharged.

Want to Know if You Could Be Eligible?

If you'd like a detailed explanation of the claims process, the documents you may need and what happens after you submit a complaint, read our dedicated guide: → How to Claim Against Black Horse Finance

There, you'll find step-by-step guidance on checking your eligibility, making a complaint and understanding what to expect throughout the claims process.

Latest FCA Compensation Update for Black Horse Customers

If you're considering a Black Horse finance claim, the biggest question is no longer whether the FCA plans to introduce compensation. It's when eligible customers could actually receive it.

The Financial Conduct Authority has already confirmed its intention to introduce an industry-wide compensation scheme for motorists who were affected by historic car finance mis-selling. However, legal challenges brought after the publication of the final scheme have delayed parts of its implementation.

While that has understandably caused frustration for many consumers, it's important to remember that the scheme has been delayed, not cancelled.

Why Has Compensation Been Delayed?

In March 2026, the FCA published its final redress scheme, setting out how eligible customers could receive car finance compensation.

Shortly afterwards, several organisations challenged aspects of the regulator's proposals through the Upper Tribunal.

As a result, parts of the scheme have been temporarily suspended while those legal proceedings are ongoing.

This means lenders are not currently required to:

• calculate compensation
• issue compensation offers
• notify customers of compensation amounts
• make compensation payments under the proposed scheme

The pause is intended to prevent firms from carrying out work that may need to change depending on the Tribunal's decision.

What Is Black Horse Doing Now?

Although compensation payments are currently on hold, work behind the scenes has not stopped.

Like other lenders, Black Horse is expected to continue preparing for the proposed compensation scheme by:

• reviewing historic finance agreements
• identifying customers who may be affected
• gathering information about commission arrangements
• preparing internal systems for future compensation assessments

This preparation should help lenders move more quickly if the FCA is able to proceed with the scheme once the legal challenges have been resolved.

Does This Affect New Claims?

No.

If you think your agreement may have been affected, you don't need to wait for the legal proceedings to conclude before exploring your options.

You can still review your agreement, complete a car finance refund check and decide whether you'd like to raise a complaint.

The current delays affect the timing of compensation payments rather than your ability to begin the process.

When Could Compensation Be Paid?

At the time of writing, the FCA has not confirmed a revised timetable for compensation payments.

Tribunal hearings are expected to continue through late 2026, meaning widespread payouts are now widely expected to begin during 2027, although this will depend on the outcome of the legal proceedings and any changes the FCA is required to make to its scheme.

Until then, consumers should be cautious of anyone claiming to know exactly when compensation will be paid.

What Should Black Horse Customers Do Now?

If you believe your agreement may have been affected, the most practical step is to make sure you understand your position.

This means:  

• checking to see if your agreement may be caught by the FCA’s proposed scheme
• collecting any paperwork or finance information you have
• staying up to date with FCA updates  
• seeking advice if you’re not sure what your options are

The legal challenges may have affected the timetable, but not the need to understand your rights.

The FCA is working towards an industry-wide solution. In the meantime, the motorists who stay informed will be best placed to take action when the next stage of the compensation scheme is announced.

How Much Could Black Horse Compensation Be?

You may be curious as to how much a successful Black Horse finance claim could be worth. But there’s no set figure for car finance compensation and no one can predict your payout until they have seen your agreement.

Under the FCA's proposed redress scheme, compensation is expected to reflect the individual circumstances of each agreement. Rather than paying every customer the same amount, lenders are expected to assess whether a consumer suffered a financial disadvantage and calculate compensation accordingly.

This means the amount of any Black Horse refund or PCP refund could vary depending on factors such as:

• the type of finance agreement
• the amount borrowed
• the commission arrangement involved
• the interest charged
• the overall financial impact on the customer

FCA Estimates

When publishing its final redress scheme, the FCA estimated that around 12.1 million motor finance agreements could fall within its scope, with approximately £7.5 billion expected to be paid in compensation across the industry.

These figures are indicative of industry wide estimates. They are not guaranteed amounts. Some customers will receive more than the average amounts shown, others will receive less, or potentially no compensation at all depending on their individual review outcome.

It is also important to note that as the compensation scheme is part of ongoing litigation, the FCA’s approach could change prior to any payments being made.

Beware of Guaranteed Payout Claims

If you've seen websites or adverts promising a specific Black Horse compensation amount, it's worth treating those claims with caution.

No lender, claims management company or solicitor can accurately calculate compensation before reviewing the facts of your individual agreement and applying the FCA's final methodology.

For that reason, it's usually more helpful to focus on whether your agreement may be eligible before trying to estimate what your compensation could be.

Want a More Detailed Breakdown?

If you'd like to understand how compensation is expected to be calculated, what could affect your payout and why every Black Horse refund is different, read our dedicated guide: → How Much Will I Get Back From Black Horse?

There, we explain the FCA's proposed methodology, the factors that influence compensation and answer the most common questions about potential payouts.

Frequently Asked Questions About Black Horse Finance Claims

Can I still claim if I've paid off my Black Horse finance?

Yes. Paying off your agreement doesn't necessarily prevent you from making a claim. Many motorists exploring car finance claims completed their finance several years ago. What matters is when the agreement was taken out and whether it falls within the FCA's proposed scheme, rather than whether you still have outstanding repayments.

What if I've sold the vehicle?

Selling, trading in or returning your vehicle doesn't automatically affect your eligibility. The focus is on the finance agreement itself rather than whether you still own the car. If your agreement meets the relevant criteria, you may still be able to pursue a Black Horse claim.

Can I claim if I no longer have the paperwork?

Yes.  It's not unusual for people to lose finance paperwork, particularly if it's several years old. Black Horse should still be able to trace your records if you give them your name, old address or approximate date of purchase. The absence of paperwork won't prevent you from seeking advice.

Is PCP included in the FCA's compensation scheme?

Yes, eligible Personal Contract Purchase agreements may fall within the FCA's proposed redress scheme. Because PCP was one of the UK's most popular finance products, many PCP claims or PCP finance claims relate to agreements entered into before the ban on discretionary commission arrangements in 2021. However, not every PCP agreement will qualify for compensation.

Is Black Horse paying compensation yet?

Not at time of writing.  The FCA's proposed compensation scheme has been subject to legal challenges and as a result it has been held up while the Upper Tribunal looks at certain aspects of the scheme. This does not mean the scheme has been dropped, but it could mean that it will take a while longer before customers receive a final outcome.

How long will a Black Horse finance claim take?

There is no confirmed timescale. While consumers can still begin exploring a claim, widespread compensation payments are now expected later than originally anticipated because of the ongoing legal proceedings. The FCA is expected to provide further updates once those proceedings have concluded.

Do I need a solicitor to make a Black Horse claim?

No. You can make your complaint to Black Horse directly if you wish. Some consumers may use a solicitor or a claims management company for assistance, others may prefer to manage the process themselves. The best option will depend on your individual circumstances and preference.

What happens if Black Horse rejects my complaint?

If your complaint is not upheld, you may still have further rights, depending on why the decision was made and the FCA's final orders. In some cases you may be able to refer the complaint to the Financial Ombudsman Service if you are eligible.

Is every Black Horse customer entitled to compensation?

No. The FCA have not said that all agreements were mis-sold PCP car finance. Each case will be looked at on an individual basis to see if the customer may have been at a financial disadvantage or if key information was not disclosed before the agreement was entered into.

How much compensation could I receive?

There isn't a standard payout. Any Black Horse compensation will depend on the circumstances of your agreement and the FCA's final methodology. If you'd like to learn more about how compensation is expected to be calculated, read our guide: How Much Will I Get Back From Black Horse?

Final Thoughts

The car finance scandal rolls on and Black Horse is one of the lenders most closely associated with the FCA's proposed compensation scheme due to its high profile in the UK motor finance market.

While legal challenges have delayed compensation payments, they haven't brought the process to an end. If you had a Black Horse PCP or Hire Purchase agreement and believe it may have been affected by car finance mis-selling, now is a good time to understand your options, gather any available information and keep up to date with the latest FCA developments.

As the position evolves, we'll continue updating this guide to reflect the latest regulatory announcements, Tribunal decisions and compensation guidance, helping you make informed decisions about your next steps.

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References:

1. The FCA estimates that around 12.1 million finance agreements could fall within the scope of its proposed redress scheme - https://www.fca.org.uk/publication/policy/ps26-3.pdf
2. the Financial Conduct Authority published its final motor finance redress scheme in March 2026 - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
3. the Upper Tribunal has since granted a partial suspension of parts of the scheme - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended
4. challenges brought by consumer group (Consumer Voice) - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
5. The group has set aside around £1.95 billion to cover the potential cost of motor finance compensation - https://www.thebanker.com/content/29f463e3-f509-4ca6-8f90-1d1873541f05
6. DCAs were banned in January 2021 - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models