Every Driver Owed Up to £830 in Car Finance Now Faces a 2027 Delay

• Around 12.1 million car finance agreements taken out between 2007 and 2024 are covered by the FCA’s redress scheme, with an average payout of £830.
• The regulator has delayed the scheme again, pushing any payments back from this year into 2027 at the earliest while legal challenges are heard.
• Drivers do not need to wait for the scheme or pay a claims firm. A free complaint to your own lender can still be logged today.

A £7.5 Billion Bill That Keeps Getting Pushed Back

Roughly 12.1 million car finance agreements are expected to qualify for compensation once the Financial Conduct Authority’s redress scheme finally goes live, covering deals taken out through two separate windows: 6 April 2007 to 31 March 2014, and 1 April 2014 to 1 November 2024. The regulator put the average payout at £830 per claim when it set out its plans in March, with the total bill across the industry estimated at £7.5 billion. For a driver who financed a car on a commission arrangement they were never told about, that average figure represents real money sitting unpaid while the scheme is held up in the courts.

The FCA announced its final approach to the scheme shortly after markets closed on 30 March 2026, following a consultation paper published the previous October. Payments were originally expected to start in July 2026. That date came and went. The FCA then pointed to November 2026 instead. On 2 July 2026, the regulator confirmed a further delay, this time tied to legal challenges working their way through the courts rather than a fixed administrative date.

Why the Scheme Has Stalled Again

Lenders challenging the scheme have forced a hearing that is now expected in December 2026 or February 2027, with a judgment due months after that. Until the courts rule, firms do not have to calculate or pay out any compensation, even for customers they already know are likely to be owed money. Money saving campaigner Martin Lewis has told drivers plainly that “things have been delayed further,” and that mid-2027 is now the earliest realistic date compensation could start, assuming the scheme survives the legal challenge without further appeal. If lenders win their case outright, the whole scheme could look very different again.

Firms are not permitted to simply sit on their hands in the meantime. They are still required to identify which of their customers are likely to be affected and to gather the information needed to calculate redress once the legal position clears, so that payments can begin quickly if and when the scheme is confirmed. What they cannot yet do is tell an individual customer a final number, or pay anything out, while the litigation is live.

What This Means If You Financed a Car Between 2007 and 2024

The underlying problem goes back to how dealers and brokers were once paid. Many lenders allowed a dealer to increase the interest rate a customer was charged on a PCP or HP agreement, with the dealer pocketing a bigger commission the higher the rate went, and the customer was often never told this arrangement existed or that it could cost them more over the life of the deal. A Supreme Court ruling and the FCA’s own investigation found this practice was widespread enough to justify an industry wide compensation scheme rather than leaving it to individual legal claims.

If you took out car finance in that 17 year window and have not already complained, Martin Lewis’s guidance is that you are likely, though not certain, to be eligible once the scheme is confirmed. The practical advice from consumer groups has not changed just as the scheme has slipped again: complaining now costs nothing, and the delay to the scheme is not a reason to leave it until compensation is confirmed. For new complaints made from 1 July 2026 onwards, lenders are expected to tell a customer within roughly five months if they believe that customer is not owed anything, which at least puts a time limit on the uncertainty even while the wider scheme is paused.

How to Complain Without Losing a Third of Your Payout

You do not need a claims management company or a law firm to put in a complaint, and the FCA is explicit that going direct to your lender costs nothing. Claims firms typically take upwards of 30 percent of whatever compensation is eventually paid, which on an average £830 claim could mean handing over more than £250 for a letter you could write yourself using a free template from a consumer advice site. If you have already signed up with a claims firm and want to cancel, be aware that some contracts include a cancellation fee, so it is worth checking the terms before walking away.

If your lender rejects your complaint and you disagree with the decision, you can ask the lender to review it, and if you are still unhappy you can refer the complaint to the Financial Ombudsman Service free of charge, or try the small claims court as a last resort. None of those routes require paying a commission to a third party, and the Ombudsman’s past record on car finance complaints suggests a meaningful share of rejected claims are overturned on review.

Why the Figures Keep Shifting

The FCA has already revised details of the scheme once after its March announcement, after feedback from lenders and consumer groups over the consultation period. The split between the two eligibility windows, the exact method used to calculate how much commission inflated a driver’s rate, and the process for identifying customers automatically rather than requiring them to apply, have all been adjusted at least once. None of those changes affect the basic message for drivers: if your agreement falls between April 2007 and November 2024 and involved a discretionary commission arrangement you were not told about, you are potentially in scope, whatever the final mechanics of the scheme turn out to be.

Lenders have also warned that the £7.5 billion industry estimate could move again depending on how the courts rule and on how many of the 12.1 million agreements in the end turn out to have been affected by discretionary commission rather than a standard, disclosed rate. Some agreements in the eligible window were never subject to the practice at all, which is one reason the FCA has resisted giving every customer an automatic payout and instead built a scheme that calculates redress on a case by case basis once it is live.

What Happens Next

The timeline now rests almost entirely on the courts rather than the regulator. A hearing in December 2026 or February 2027 will decide whether the scheme as designed can proceed, and a judgment is expected to follow some months later. If the scheme clears that hurdle without further appeal, the FCA’s own guidance points to compensation payments beginning sometime in 2027, not this year. Drivers who are owed money are not losing their right to claim by waiting, as the scheme as proposed would still apply retrospectively to agreements already taken out. The risk for most people is not missing a deadline. It is assuming nothing needs to be done until a letter arrives, and leaving money on the table for another year while nothing happens.

Anyone unsure whether their own agreement falls inside the qualifying window should start by checking old finance paperwork or contacting the lender directly to ask whether a complaint is already on file. Lenders are obliged to keep records for complaints made under the scheme, and starting that conversation now, rather than waiting for a scheme that keeps slipping, is the only step within a driver’s control.

Sources:

• MoneySavingExpert: Car finance redress scheme likely delayed until at least 2027
• FCA: Timing of the FCA’s motor finance announcement
• FCA: CP25/27 Motor finance consumer redress scheme