FCA sets rules for early car finance compensation offers

What has happened

On 3 November 2026 the Financial Conduct Authority (FCA) published its expectations for car finance lenders that want to offer compensation now, rather than wait for the outcome of the legal challenges to its compensation scheme. Those challenges are due to be heard between 16 February and 3 March 2027.

The FCA supports these settlement offers as long as customers are offered no less than they would receive through the scheme. Lenders must give customers an FCA factsheet explaining what accepting an offer means, and they are expected to tell the FCA if they plan to make offers.

Barclays Partner Finance has confirmed it will make settlement offers to some of its customers who are owed compensation. The FCA says not all lenders are likely to make offers, and those that do may only make them to some customers.

The FCA also published research by Kantar. Of the car finance customers surveyed who had complained or were thinking about it, 89% said they wanted the choice of an offer now rather than waiting.

What it means for you

If you get an offer, the choice is yours. If you accept, you keep the money whatever happens in court, even if the scheme ends up paying less. But you cannot claim more later if the scheme ends up paying more. You also cannot ask the Financial Ombudsman Service to review the offer.

If you turn the offer down, nothing is lost. Your lender still has to respond to your complaint and tell you whether you are owed compensation and how much, but the timing of that answer is uncertain until the legal process ends. The FCA expects scheme payments to begin in 2027 if the scheme is upheld and the judgment is not appealed.

Most people will not get an offer for now. That does not mean you are not owed anything. It only means your lender has not chosen to settle early. Our earlier story explains why the scheme is on hold and which complaint deadlines still apply.

Who it affects

People who used finance to buy a car, motorbike or van between 6 April 2007 and 1 November 2024, especially anyone who has already complained to their lender.

What you can do

• If you have concerns about a car finance deal and have not complained yet, complain directly to your lender. It is free, and the FCA's car finance page explains how.
• If an offer arrives, read the FCA factsheet that comes with it and take your time. There is no obligation to accept, and you can wait for the scheme instead.
• Check that an offer is genuine. The FCA lists the lenders that have told it they are making offers on its car finance page. A real lender may ask for your account number and sort code to pay you, but you should never be asked for a fee, a password or a PIN.
• You do not need a claims management company or a law firm. The FCA warns they may charge up to 36% of any compensation, including VAT.
• If car finance payments are a struggle now, tell your lender and get free debt advice. You do not have to wait for any compensation to get help.

Sources

Every fact in this page was checked against these official sources on 4 November 2026.

1. FCA sets expectations for firms making car finance settlement offers Financial Conduct Authority
2. Car finance claims Financial Conduct Authority

Written and fact-checked by the PiggyBank editorial team. Published 4 November 2026. This news is general information, not financial advice. How we write and check our guides.