Car finance redress scheme likely delayed until at least 2027 – but you should still complain in the meantime

Martin Lewis: 'Things have been delayed further'

Regulator the Financial Conduct Authority (FCA) confirmed the delay on Thursday 2 July, and Martin posted his instant reaction on social media. Here's what he said – with further detail below it...

Payouts now unlikely to start until 2027 at the earliest

Millions of drivers waiting for compensation over car finance mis-selling are facing yet another delay after the financial regulator confirmed that payments aren't now expected until at least 2027.

Payouts were originally due to begin this July, but they were put on pause due to multiple challenges to the FCA's official redress scheme. At the time, FCA said payouts wouldn't take place until at least November 2026.

But now the FCA says lenders do not need to calculate or pay compensation until the legal challenges have been heard. A hearing is now expected either in December 2026 or February 2027, with a judgment due months later.

This means that if the FCA's redress scheme is upheld – and there are no further appeals or delays – payments would begin in 2027.

Despite the delays, the FCA says firms must continue with much of the admin work in the background so that, if the courts ultimately uphold the scheme, compensation can begin as quickly as possible in 2027. This includes identifying affected customers and gathering information needed to calculate any redress due, for example.

Already complained? Your lender may contact you if it thinks you aren't due redress

The FCA has now instructed car finance firms to write to some people who have complained but who WON'T be covered by its scheme. This means that, if you've already submitted a complaint but haven't heard back, you may get a response from your lender in the next few months to tell you that it thinks you won't be due redress.

Lenders have been set specific deadlines to contact people, but these are still several months away – so you may not hear from your lender straight away (see the exact timeframes on the FCA's website). For new complaints from 1 July 2026 onwards, in most cases your lender should tell you within five months (of getting your complaint) if it thinks you aren't due redress.

If your lender tells you that you are not owed compensation under the scheme rules or that your case falls outside of the scheme, and you believe it has made a mistake, you should ask your lender to review its decision. If you are still unhappy, you can refer the complaint to the Financial Ombudsman Service. You can also consider whether to pursue a claim through the courts.

If you don't hear anything, it's likely – but not certain – that you're eligible for redress under the scheme, though until the ongoing legal challenges are resolved, it's impossible to know for sure.

What happens if the courts overturn the scheme?

If the scheme is overturned in whole or part, the FCA says it will "need to decide what to do next". This could include completely changing tack and requiring firms to resolve complaints individually instead of having a mass redress scheme.

We believe this would be a much worse outcome for many. An FCA-run redress scheme would see firms proactively identify and compensate everyone who is owed money. If complaints instead have to be dealt with on an individual basis, many eligible consumers who don't complain could miss out entirely. And this is particularly true of those who are considered vulnerable – either financially or in other ways.

It's still best to get your complaint in ASAP

When the news of legal challenges first broke in April, MoneySavingExpert.com founder Martin Lewis said: "The most important thing is don't let this put you off putting a complaint in. If you had PCP or HP motor vehicle finance from April 2007 to November 2024, putting a complaint in likely means an easy and quicker payout, and you don't need to pay anyone to do it – just use the free DIY tool."

The regulator has also reiterated that its advice for consumers is to complain directly to their lender, warning: "You don't need to use a law firm or claims management company (CMC), which may charge you over 30% of any compensation. Don't sign up to multiple CMCs or law firms as you may be charged multiple fees."

It also added additional guidance, saying: "If you signed up with a CMC or law firm and now wish to cancel, you may be asked to pay a fee. That fee must be reasonable and reflect the work done. Most car finance claims are still at an early stage, so you should check any fee demand very carefully."

If you signed up to a car finance claims firm but you're unhappy with it, here's how to complain.

Car finance redress scheme need-to-knows

Details of the FCA's major car finance redress scheme were published in March 2026. Below are some of the key points from that initial announcement, though things could now change depending on how the various legal challenges play out.

• There were due to be two separate redress schemes. One covering agreements between 6 April 2007 and 31 March 2014; and another covering agreements between 1 April 2014 and 1 November 2024.

• Around 12.1 million agreements were to be eligible for compensation.

• The average typical payout per claim was due to be £830.

• The total amount to be paid out was expected to be £7.5 billion.

To keep up to date with the latest news about the car finance redress scheme, sign up to our weekly email or download the free MoneySavingExpert app from the Apple App Store or Google Play Store.