Car finance compensation: where things stand (October 2026)

In short: the FCA set up a scheme to compensate people treated unfairly on car finance between 2007 and 2024 (estimated at £7.5 billion overall). Parts of it are suspended pending a legal challenge heard 16–26 February 2027. You can still complain to your lender for free. [source: FCA]

Key dates

18 Nov 2026Lenders should contact you if your agreement began on or after 1 April 2014 and you complained by 30 June 2026
18 Jan 2027Same for agreements before 1 April 2014 if you complained by 31 August 2026
16–26 Feb 2027Upper Tribunal hears the challenge; judgment expected in the following months
2027Payments expected to begin if the scheme is upheld and not appealed

Sources: FCA – Car finance claims; FCA statement on the February 2027 hearing; FCA PS26/3. Checked 15 October 2026.

Not getting a letter doesn't mean you're owed money – the FCA says some people won't hear until the legal process ends. And you don't need a claims firm: complaining to your lender is free.

What you can do now (free)

  1. Find your old finance agreements (or ask the lender for a copy).
  2. If you haven't already, complain directly to the lender – the FCA page explains how.
  3. Keep any letters you get and note the dates above.
  4. If you're unhappy with a final response, the Financial Ombudsman Service is free.

FAQs

Has car finance compensation been paid yet?

Not under the FCA scheme. Parts of the scheme were suspended after a legal challenge, which the Upper Tribunal will hear on 16–26 February 2027. Until that ends, lenders do not have to calculate or pay compensation under the scheme. If the scheme is upheld and not appealed, the FCA expects payments to begin in 2027.

Do I need a claims company to claim car finance compensation?

No. You can complain directly to your lender for free. A claims management company or law firm will usually take a share of any payout.

When should my lender contact me?

According to the FCA: if your agreement began on or after 1 April 2014 and you complained by 30 June 2026, your lender should contact you by 18 November 2026. If it began before 1 April 2014 and you complained by 31 August 2026, by 18 January 2027.

How much is the scheme worth?

The FCA estimated the scheme would pay out about £7.5 billion in total.