On 30 March 2026 the Financial Conduct Authority finalised its motor finance consumer redress scheme, and from 30 June 2026 lenders must start writing to people who took out car finance on the wrong terms. I have read the policy statement so you do not have to, and the short version is this: if you bought a car on PCP or hire purchase between 6 April 2007 and 1 November 2024, there is a real chance a cheque is coming to you for free, and the one thing that would make me angry is watching someone hand a third of it to a claims firm for a letter I would write myself in ten minutes.
What the FCA actually decided in March 2026
The regulator confirmed an industry-wide scheme covering motor finance agreements taken out between 6 April 2007 and 1 November 2024, where a lender paid the dealer a commission that was not properly disclosed to the buyer. The FCA’s confirmation statement sets the expected payout at around £7.5 billion across roughly 12.1 million agreements, with most claims settled by the end of 2027. The full detail sits in policy statement PS26/3, published 30 March 2026.
How the redress is worked out, including the interest
This is the part I want you to hold on to, because it is where the money is. The FCA’s scheme pays simple interest on top of any redress, set at the annual average Bank of England base rate plus one per cent for each year, with a floor of three per cent a year, running from the date you overpaid to the date you are paid. On an agreement from, say, 2016, that interest can quietly double a modest core figure. The numbers in any letter you receive are the lender’s calculation, not mine and not a finance offer, so check them against the scheme rules before you accept.
Why a claims management company is the worst seat at the table
Claims management companies are advertising hard, and their pitch is that the process is complex. It is not. The scheme is free to use and the lender has to do the work of finding and contacting you. A typical CMC will take 25 to 30 per cent plus VAT of whatever you receive, which on a four-figure payout is hundreds of pounds for forwarding a form. If you have already signed with one and regret it, you usually have a short cooling-off window. Complain directly, and if the lender’s answer is poor you can escalate to the Financial Ombudsman Service at no cost.
What to do now if you have ever financed a car
- Wait to be contacted, but do not sit blind. Lenders must begin writing to affected post-April-2014 customers from 30 June 2026; dig out the finance agreement so you can sanity-check what they send.
- Keep the paperwork. The original agreement, your settlement figures and any commission disclosure are what let you verify the lender’s sum.
- Use the free route. The FCA’s own car finance complaints guidance walks you through it without a middleman.
- Do not let a windfall pick your next car. If redress lands while you are shopping, treat it as a deposit, not a reason to stretch the monthly payment.
Where I’d put my money on this
If I had a PCP or HP deal anywhere in that 2007 to 2024 window, I would do nothing expensive and everything free: wait for the letter, check the figure against PS26/3, and bank the lot. The buyer this suits is anyone who financed through a dealer and never saw a commission disclosed, which is most people. The buyer who should walk away from the CMC adverts is, frankly, all of them. None of this is a finance recommendation and your own circumstances will decide what your agreement was worth, but on a free scheme with statutory interest attached, paying someone a third to claim it for you is the one move I would not make.
Buyer action
Where to check next
Use this as the final check before paying a deposit, signing finance paperwork or relying on a headline monthly figure.
