FCA Sets a September 30 Deadline for Your Car Finance Redress Answer

• Lenders must tell every eligible customer whether they are owed car finance compensation by 30 September 2026, under the Financial Conduct Authority’s redress scheme.
• 12.1 million agreements are covered, with average redress set at £829 and a total industry bill of £7.5 billion.
• Customers then have until 31 October 2026 to accept or challenge the offer, and separate legal challenges are still working through the Upper Tribunal.

The Deadline That Decides Who Gets Paid First

Millions of UK drivers who took out car finance between 2007 and 2024 are about to find out, one way or another, whether they are owed money. The Financial Conduct Authority has confirmed that lenders covered by its motor finance redress scheme must write to affected customers with a decision, and a figure, by 30 September 2026.

The regulator’s scheme, first flagged by an earlier August deadline, was triggered after courts ruled that lenders broke the law by failing to tell customers about commission arrangements with brokers and dealers, arrangements that in many cases pushed up the interest rate a driver paid without them knowing. Rather than leaving 12.1 million individual complaints to the Financial Ombudsman Service and the courts, the FCA opted for a single industry-wide scheme with fixed rules, fixed timescales and a fixed method for working out what each customer is owed.

Who The September 30 Deadline Hits

The scheme runs on two tracks, split by when the finance agreement started. Agreements from 1 April 2014 onward had an implementation period that ended 30 June 2026, giving lenders three months, until 30 September 2026, to work through their records and tell each customer whether they are owed anything and how much. Older agreements, running from 6 April 2007 to 31 March 2014, had a longer implementation period ending 31 August 2026, so their three-month notification window runs to the end of November.

For most drivers reading this, the September date is the one that applies. If a car, van or motorbike was bought on finance any time from 2014 onward and a broker or dealer arranged the deal, a letter, text or email should already be on its way, if it has not landed already.

Not every customer has to wait to be contacted. Anyone who complained to their lender before the scheme’s implementation period ended gets their answer sooner, and the FCA has said those cases are being worked through first. Drivers who have not complained and are not contacted at all by their lender can still raise a complaint directly, right up until 31 August 2027, if they think they were missed.

The Numbers Behind The Scheme

The FCA has tightened the scheme considerably from the version it first put out for consultation. Eligible agreements have fallen from 14.2 million at the consultation stage to 12.1 million now, after the regulator excluded agreements with minimal commission, zero-interest deals, and cases where a lender can show a manufacturer and dealer were openly linked rather than secretly tied.

Average redress per agreement is now set at £829, down from the £775 estimated earlier this year, though the total industry bill has actually fallen, from an estimated £11.8 billion to £9.1 billion, with fewer agreements now qualifying. Of that, £7.5 billion is expected to go directly to customers as redress, with the rest covering the cost to firms of running the scheme itself.

Around 90,000 of the strongest cases, those that closely match the pattern in the Court’s Johnson ruling, involving a hidden contractual tie or discretionary commission arrangement and very high commission, will get back all the commission paid plus interest. Everyone else falls under what the FCA calls the hybrid remedy, a blend of estimated loss and commission paid, with interest added at the Bank of England base rate plus one percent, and a floor of three percent a year regardless of how far rates fall.

Not everyone gets a payout. Around 64,000 agreements, where the interest rate charged was already among the lowest five percent in the market at the time, will not qualify for compensation under the scheme’s rules, as the FCA’s analysis found the customer was unlikely to have lost out.

What It Costs If You Miss It

There is a second date that counts almost as much as the first. Once a lender’s letter arrives, a customer has six months to respond and join the scheme, though the FCA is encouraging drivers to reply well before then. Miss both the lender’s contact and the 31 August 2027 fallback deadline, and a customer risks losing the right to compensation through the scheme altogether, though a route through the Financial Ombudsman Service or the courts can still, in narrow circumstances, remain open.

There is also uncertainty hanging over part of the scheme, as previously reported. In July 2026 the Upper Tribunal suspended parts of the rules after four lenders mounted a legal challenge, though the FCA has said firms must keep complying with every rule that has not been specifically suspended. The regulator is defending the scheme and says it expects most eligible customers to be compensated this year, with the rest paid by the end of 2027, but a further legal setback could yet change the timetable for some agreements.

What It Means For The Wider Car Finance Market

The scheme was designed with one eye on keeping the motor finance market functioning normally while the compensation bill is paid, and the FCA’s own figures suggest that, so far, it has. Share prices of the UK-listed lenders most exposed to the redress scheme rose by between 2.1 and 29.7 percent in the two weeks after the Supreme Court judgment that triggered the whole process, and continued climbing steadily until recent conflict in the Middle East unsettled markets generally. Five public securitisations of UK car loans have gone ahead from September 2025 onward, a sign that investors are still willing to fund new lending with the compensation bill hanging over the sector.

New car sales in February reached a 22-year high, and a record £41 billion was lent on motor finance across 2025, six percent up on the year before. The FCA has said it expects the redress scheme to have a limited effect on the new car finance market overall, though it has acknowledged the used and subprime segments of the market could see some short-term disruption as smaller lenders absorb both the direct cost of redress and the cost of running the scheme itself. Removing the requirement to write to every customer, rather than only those likely to be owed money, was one of the changes the FCA made specifically to keep the scheme affordable for smaller firms.

What Drivers Should Do Now

Anyone who financed a car, van or motorbike between April 2007 and November 2024, especially through a dealer arranging the finance rather than going direct to a bank, should check their post, email and phone messages for contact from their lender over the coming weeks. The FCA has told firms they can use a mix of channels, including text and email, so it is worth checking accounts that might otherwise be ignored.

If no letter has arrived by early October and a driver believes they had a relevant agreement, contacting the lender directly, rather than waiting for the 2027 fallback date, is the faster route to an answer. The FCA’s own consumer guidance sets out how to complain and what a fair offer should look like, and drivers do not need to pay a claims management company or a law firm a share of their payout to take part. Complaints handled directly with the lender, or through the Financial Ombudsman Service if a customer disagrees with the answer, cost nothing.

Sources

Financial Conduct Authority, “FCA confirms motor finance redress scheme” (statement, first published 30 March 2026, updated 14 September 2026): fca.org.uk

Financial Conduct Authority, Policy Statement PS26/3, Motor Finance Consumer Redress Scheme: fca.org.uk