What the FCA Court Delay Means for Your Average £830 Car Finance Payout

• The Upper Tribunal will now hear the legal challenges to the FCA motor finance scheme from 16 to 26 February 2027, so payouts are only expected to begin in 2027 if the scheme is upheld.
• The FCA puts average compensation at around £830 per agreement, with 12.1 million agreements (37%) eligible and £7.5bn of redress expected at 75% uptake.
• If the scheme is overturned, the FCA says compensation could be delayed until 2028 or beyond, and lenders do not have to calculate or pay anything until the legal process ends.

The Car Finance Payout Date Has Moved Into 2027

The Financial Conduct Authority has confirmed that the legal challenge holding up its motor finance compensation scheme will be heard by the Upper Tribunal between 16 and 26 February 2027. The regulator posted the update on 13 October 2026, and the judgment is expected in the months that follow the hearing.

The date is the part that hurts anyone waiting for money, as the scheme was originally built to pay out much sooner. The FCA’s final rules, published as policy statement PS26/3, set a timetable under which redress for the more recent agreements would be paid by November 2026 and redress for older agreements by January 2027. Those dates have been overtaken by events. The FCA’s own statement of 2 July 2026 says the Upper Tribunal made an order suspending parts of the scheme, so the original payment dates no longer apply.

What the regulator now says is conditional. In its words, “if the scheme is upheld, and the judgment isn’t appealed, we expect payments under the scheme to begin in 2027.” The same statement gives the other side of that sentence: if the scheme is overturned, compensation “could be delayed until 2028 or beyond.”

The hearing date itself has slipped. In July the FCA said the Upper Tribunal would hear the challenges on 14 to 18 December 2026 or 16 to 26 February 2027. The October update settles it: February 2027. That puts any judgment after the hearing in February 2027.

For a driver who has been following the car finance story for two years, that is a long wait with two possible endings, and neither can be known until a tribunal rules.

Who Is Challenging the Scheme and What Has Been Paused

The suspension came through an order of the Upper Tribunal, made on terms agreed with four challengers. The four are Consumer Voice, which is represented by Courmacs Legal, Volkswagen Financial Services, Mercedes Benz Financial Services and Crédit Agricole Auto Finance. The group includes a consumer body and the finance arms of three motor groups and banks.

The FCA statement is specific about what the suspension covers. Lenders are not required to calculate or pay redress, and they do not have to send communications about compensation owed under the scheme, until the Upper Tribunal process concludes. In plain terms, nobody is going to receive a redress offer from a lender under this scheme in the meantime.

Not everything has stopped. The FCA says all rules which are not suspended remain in force. Firms still have to identify complaints, and they still have to tell complainants who are not owed compensation. Two deadlines sit in the FCA’s statement for those letters. For agreements made from 1 April 2014 where the complaint was made by 30 June 2026, the date is 18 November 2026. For agreements made before 1 April 2014 where the complaint was made by 31 August 2026, the date is 18 January 2027. In other cases the deadline is five months.

So the next few weeks could still bring letters, but they would be letters saying no compensation is owed, not cheques.

The Numbers Behind the Scheme

The scale of the scheme is what makes the delay costly for so many households. The FCA’s consumer page says that 37% of agreements made at the time are eligible for compensation, which it puts at around 12.1 million agreements. That is down from the 14.2 million the regulator estimated earlier in the process.

The headline average is around £830 per agreement, according to the FCA’s consumer page and paragraph 1.35 of PS26/3. The figure rose from £695 at the consultation stage. The policy statement’s own table shows £829, based on a sampling approach covering 89% of the data.

The FCA estimates that firms will pay redress of £7.5bn, assuming 75% of eligible people take part. If every eligible person took part, the redress liability would be £10.0bn. Adding non-redress costs of £1.6bn, the expected bill to firms is £9.1bn. The assumed take up differs between the two schemes, at 72% for the older one and 76% for the newer one.

Interest is part of the sum. PS26/3 sets interest at the Bank of England base rate plus 1%, with a minimum of 3% a year. That means the longer the process runs, the larger the amount owed on each agreement becomes, if the scheme survives the challenge.

The Original Timetable Compared With Today

It helps to set the old plan beside the new one. Under PS26/3 before the suspension, redress for Scheme 2 agreements was due by November 2026, after an implementation period that ended on 30 June 2026. Redress for Scheme 1 agreements was due by January 2027, after an implementation period that ended on 31 August 2026.

Those dates were the product of months of work by lenders, who had to identify eligible agreements, calculate redress and write to customers. The suspension stops that final stage. The FCA’s statement records that firms must now carry on with the parts of the scheme that have not been suspended.

For the driver, the effect is simple. A payout that the rules once pointed to for the end of 2026 or the start of 2027 now depends on a hearing that has not yet taken place.

Which Agreements Are Covered

The scheme is split in two. Scheme 1 covers agreements from 6 April 2007 to 31 March 2014. Scheme 2 covers agreements from 1 April 2014 to 1 November 2024. Together the two periods take in 17 years of motor finance lending.

The FCA’s consumer page is the place to check whether an agreement falls inside those windows and whether it is among the 37% judged eligible. The average of around £830 is not a promise for any individual driver. A driver with an agreement from 2012 and a driver with one from 2022 sit in different schemes with different completion dates, and the amounts will vary with the details of each finance deal.

It is worth separating the average from the individual outcome. An average of £830 across 12.1 million agreements means some payments will be lower and some higher.

What Drivers Should Do While They Wait

Under the suspension order, lenders do not have to calculate or pay anything, so there is no action that speeds up a payout through the scheme before the Upper Tribunal rules.

The FCA’s consumer page, last updated on 13 October 2026, is the regulator’s own guidance and is the best single place to track the position. Anyone who made a complaint should expect any letter from their lender to follow the dates set out above. A letter saying no compensation is owed is a possible outcome under the rules that remain in force.

The wider timetable is now clear in outline. The hearing runs from 16 to 26 February 2027. A judgment follows in the months after that. If the scheme is upheld and nobody appeals, the FCA expects payments to begin in 2027. If it is overturned, 2028 or later is the regulator’s own warning.

For millions of drivers who financed a car between 2007 and 2024, that is the answer the FCA can give today. The sum on offer is real and sizeable. The date it arrives is now in the hands of a tribunal.

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Sources:

• FCA: Motor finance scheme partially suspended
• FCA: Car finance claims
• FCA: PS26/3 Motor finance consumer redress scheme (PDF)