The FCA car finance investigation has quickly become one of the most talked-about financial issues in the UK. Millions of drivers who took out PCP or HP agreements years ago are now discovering they may have been affected by the car finance scandal. The scale of the situation has surprised even those who follow industry news closely, and it has left many people asking the same question.

When will refunds actually be paid?

Right now, the answer depends entirely on the FCA consultation taking place from October until 12 December 2025 [1]. This consultation is not a simple review. It is the process that will decide exactly how lenders must handle historic FCA car finance claims, how redress should be calculated, and which customers will qualify for compensation.

Until these rules are set, lenders are legally prevented from issuing final decisions for any car finance claim linked to commission, non-disclosure, or fairness concerns. That means the refund timeline sits firmly in the hands of the FCA until early 2026.

This guide explains what the consultation means for your claim, why the wait is happening, why being early in the queue still matters, and what you can do now while the FCA finalises the rules.

Why Refund Timelines Feel So Uncertain Right Now

The pause on lender decisions [2] has created a lot of worry and confusion. Drivers submit a PCP claim or another form of car finance claim, only to hear nothing for months. Understandably, people assume something is wrong.

Many common worries include:

“Has my complaint been forgotten?”

“Do I need to submit again?”

“Will I lose my place in the queue?”

“Are lenders ignoring people?”

“Does the pause mean I should wait before complaining?”

The FCA has confirmed that none of these concerns reflect what is happening behind the scenes. The pause exists because lenders must not make decisions until the FCA publishes the final rules. If lenders acted before those rules existed, decisions would be inconsistent, unfair, and legally challengeable.

So the pause is not something to fear. In many ways, it protects consumers. It ensures every mis-sold car finance complaint will be reviewed under one consistent nationwide standard.

What the FCA Consultation Is Actually Deciding

The consultation is the backbone of the entire refund process. It is not a survey or a quick administrative step. It shapes the foundation of the redress scheme that will guide lenders throughout 2026 and beyond.

Below is a detailed look at what the consultation is deciding and why each part matters.

Who Will Qualify for the Redress Scheme

The FCA is finalising which groups should be included. This covers:

• PCP car finance agreements
• Hire Purchase agreements
• Conditional sale contracts
• Agreements taken out between 6 April 2007 and 1 November 2024 [3]
• Vehicles used for personal use, commuting, or qualifying small-business use

Leased vehicles like PCH are excluded because they are rental agreements, not credit agreements.

This eligibility decision determines who can pursue FCA car finance claims once the scheme goes live.

How Refunds Will Be Calculated

Refund calculations are one of the most complex parts of the process. The FCA must set rules that lenders can apply to millions of agreements without room for interpretation.

These rules will cover:

• How to identify unfair commission structures
• How interest was inflated in PCP claims and HP claims
• How much interest consumers should get back
• Whether you still get compensation even if you no longer own the vehicle
• How to handle multiple agreements from the same customer
• Whether certain groups receive higher levels of compensation
• How to treat the very highest commission cases highlighted by the FCA

These decisions will have a direct impact on refund size and processing time.

What Evidence Lenders Must Check

The FCA does not want lenders taking shortcuts or dismissing legitimate claims. So the consultation is reviewing exactly what evidence lenders must use.

This may include:

• Original rate sheets
• Commission models
• Dealer-lender agreements
• Internal sales notes
• Affordability assessments
• Any automated rate-setting tools
• Whether the dealer truly had access to a panel of lenders
• Evidence of discretionary commission structures

This level of evidence ensures that FCA car finance claims are not judged on guesswork or missing documents.

How Historic Agreements Must Be Reviewed

The consultation is deciding the process lenders must follow. This includes:

• Whether checks must be manual or automated
• How auditors should verify decisions
• How lenders must explain outcomes to customers
• How disagreements should be escalated
• Whether customers should receive clear breakdowns of calculations

This ensures that lenders cannot hide behind vague explanations.

How the Backlog Will Be Managed

There are already thousands of complaints in queues across the country. The FCA will decide:

• How lenders must prioritise cases
• Whether older cases should be handled first
• How long lenders have to issue decisions once the rules go live
• What happens if lenders fall behind
• How the Ombudsman will slot into the process

This directly affects when your refund may arrive.

Why Refund Timing Depends Entirely on This Consultation

Refunds cannot begin until:

• The consultation closes
• The FCA assesses all responses
• Final rules are published
• Lenders complete their system upgrades
• Auditor checks are in place
• Staff are trained
• Calculation models are approved

No lender is allowed to move ahead early.

The Supreme Court ruling from August 2025 [4] added another layer to this. The ruling clarified how fairness should be judged in cases involving commission, so the FCA must incorporate those findings into the scheme.

This is why any promised timeline before early 2026 should be treated with caution.

What Happens After 12 December 2025

Once the consultation closes, a detailed and structured process begins.

Step 1: The FCA reviews all feedback

The FCA receives submissions from:

• Consumer protection groups
• Banks and finance houses
• Claims management companies
• The Ombudsman
• Legal and industry experts
• Economists and fairness specialists

This stage shows how large and complex the process is.

Step 2: The FCA drafts the final rules

The FCA prepares:

• Eligibility rules
• Calculation instructions
• Review processes
• Timeliness requirements
• Dispute processes
• Rules on evidence
• Restrictions on lender behaviour

These rules must work fairly for millions of drivers and dozens of lenders.

Step 3: The FCA publishes the final rules

Most experts expect publication between February and April 2026.

Step 4: Lenders prepare their systems

This is the part that takes time. Lenders must:

• Rebuild internal systems
• Train their staff
• Set up dedicated review teams
• Work with auditors
• Test the software that calculates redress
• Create communication plans
• Prepare customer-facing documents

Only when this preparation is complete can the refund processing begin.

What This Means for Refund Timing

Based on everything the FCA has made public, the timeline looks like this:

• Consultation closes: 12 December 2025
• FCA reviews feedback: January to March 2026
• Final rules published: Early 2026
• Lender preparation period: Spring to Summer 2026
• Refund decisions issued: Second half of 2026
• Refund payments: From late 2026 and into 2027

Refunds are unlikely to be issued earlier because the rules do not yet exist.

Why Being in the Queue Still Matters

Some drivers think the smart move is to wait until 2026 to submit their complaint. That is not correct.

Submitting now matters for several reasons:

• The queue is already long
• Lenders must review in date order
• Early claims will be processed sooner
• The FCA has encouraged people to complain now
• The pause stops deadlines from expiring
• Your documents are easier to gather today than in a year or two
• There is no benefit to waiting

If you are already in the queue, your position is protected.

What You Should Do Now

Here are practical steps drivers can take while waiting for the FCA’s next announcement.

Gather your documents

This may include:

• The car finance agreement itself
• Dealer paperwork
• Emails or text messages about the sale
• Bank statements showing payments
• Evidence of add-ons such as GAP
• Settlement or early termination documents

You do not need everything, but anything you have helps.

Submit your complaint

If you have not already submitted a car finance claim, now is the right time. Even though lenders cannot issue decisions, your case will be logged.

Keep all correspondence

If your complaint eventually goes to the Ombudsman, you may need to show your history.

Use an eligibility checker

Reclaim247’s free eligibility checker can help you understand whether mis-sold car finance applies to your situation. This can save a lot of uncertainty.

Example Scenarios: What Different Drivers Can Expect

To give a clearer sense of timing, here are realistic timelines for different groups of people.

If you complained in early 2024

Your complaint is already in the backlog. You will likely be among the earlier cases reviewed.

Expected outcome: Mid to late 2026

If you complain now, in late 2025

You secure your place ahead of the surge expected in mid-2026.

Expected outcome: Late 2026

If you wait until mid-2026

By this point, lenders will be handling the busiest part of the queue.

Expected outcome: 2027 or later

Common Misunderstandings

There is a lot of incorrect information online. Here are the misconceptions that cause the most worry.

“The pause means I cannot complain.”

You can complain at any time.

“Refunds will start when the consultation ends.”

Refunds cannot be processed until the FCA publishes rules.

“My complaint does not count until the scheme launches.”

Early complaints are protected and carried forward.

“The scheme only covers PCP claims.”

HP and conditional sale agreements are included too.

“If I traded in my car, I cannot claim.”

This is not true. You may still be eligible.

You can read more about that here: Can I claim compensation if I traded in the car years ago?

Closing Thoughts

The FCA consultation is shaping the future of FCA car finance claims for the entire country. It determines who qualifies, how refunds are calculated, and how lenders must review historic agreements. While the timeline may feel slow, it is moving, and the outcome will provide clarity for millions of drivers.

Refunds for mis-sold car finance are not expected until late 2026, but the steps you take now still matter. Submitting a PCP claim or any type of car finance claim today secures your place in the queue and ensures your case is ready for review.

If you want to understand whether your agreement may have been affected by the car finance scandal, you can use Reclaim247’s free eligibility checker to get started.

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References:

1. FCA consultation taking place from October until 12 December 2025 - https://www.fca.org.uk/news/statements/motor-finance-compensation-scheme-consultation-progress-and-timing 

2. The pause on lender decisions - https://www.fca.org.uk/news/statements/update-motor-finance-work

3. Agreements taken out between 6 April 2007 and 1 November 2024 - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme

4. Supreme Court ruling from August 2025 - https://supremecourt.uk/cases/uksc-2024-0157