Car finance settlement offers: what they mean and what you can do
The Financial Conduct Authority (FCA) has confirmed that car finance lenders can make settlement offers to customers while the legal challenges to its redress scheme continue.
If you had a PCP or hire purchase agreement between 6 April 2007 and 1 November 2024, your agreement may fall within the FCA's redress scheme, subject to its eligibility criteria. However, meeting these dates does not automatically mean you are entitled to compensation or will receive a settlement offer.
This guide explains what a settlement offer is, what accepting one means and the options available.
What has the FCA announced?
On 3 November 2026, the FCA set out what it expects from lenders that want to make settlement offers. These offers are for customers who could be owed redress under its Motor Finance Commission Consumer Redress Scheme.
The FCA supports lenders making voluntary settlement offers, provided the amount offered is no less than the customer would receive under the scheme. The FCA doesn't approve individual offers, but it will monitor lenders that make them. Research carried out by Kantar for the FCA found that nearly 9 in 10 customers who had complained, or were considering making a complaint, wanted the option of receiving an offer rather than waiting for the legal challenges to finish.
What is a settlement offer?
A settlement offer is a voluntary offer from a lender to resolve a complaint outside the redress scheme. Lenders don't have to make settlement offers, and accepting one is optional. It's a separate route that some lenders are choosing to offer while parts of the scheme are suspended.
Lenders making a settlement offer must also provide an FCA factsheet. The factsheet explains what accepting the offer would mean, so customers can make an informed decision.
What happens when a settlement offer is accepted?
Accepting a settlement offer means agreeing to a full and final settlement of the matters covered by the FCA's redress scheme. If the offer is accepted:
- the customer keeps the money offered, even if the outcome of the legal challenges means they would have received less under the scheme
- the customer cannot claim further compensation for the matters covered by the scheme, even if the outcome means they would have received more
- the existing complaint will ordinarily be treated as withdrawn for the matters covered by the offer
- the offer itself cannot be referred to the Financial Ombudsman Service for review
The FCA expects lenders to explain all of this clearly when they make an offer.
Are settlement offers optional?
Yes. Accepting a settlement offer is optional. A customer can turn down an offer, and the lender will still need to respond to the complaint, explaining whether compensation is owed and, if so, how much. However, the timing of this response is uncertain until the legal process ends.
Before making a decision, customers should read the factsheet provided by the lender and ask for clarification if anything is unclear.
Which lenders are making settlement offers?
Barclays Partner Finance has confirmed it will make settlement offers to some customers whose complaints were acknowledged on or before 1 October 2026. Barclays says the offers will be calculated using the FCA scheme's methodology and that accepting one is optional. Read more in our post on Barclays Partner Finance's early settlement offers, or our Barclays car finance guide.
Not every lender is expected to make settlement offers, and those that do may only make them to some customers.
Lenders are expected to tell the FCA before they make settlement offers, and the FCA will list them on its website. Anyone who receives an offer can check that list to make sure it's genuine.
Where does the redress scheme stand?
The FCA's redress scheme covers eligible PCP and hire purchase agreements taken out between 6 April 2007 and 1 November 2024. It's currently partially suspended while legal challenges are heard, with the hearing due to take place between 16 February and 3 March 2027 (FCA).
During the suspension, lenders must keep preparing for the scheme and keep progressing complaints as far as they can. They don't need to work out or pay redress under the scheme until the legal process ends.
You can read more in our guide to the FCA's February 2027 court hearing.
What happens when Mis-sold Expert customers receive an offer?
If a lender makes a settlement offer on a complaint Mis-sold Expert is handling, we'll explain what the offer means and the options available, so the customer can decide how they'd like to proceed. Find out more about how we help with car finance claims.
Customers who receive an offer directly from their lender should let us know before responding.
Questions about a settlement offer? Contact our team
How to make a car finance complaint
Anyone concerned about a car finance agreement can complain directly to their lender for free and, where appropriate, refer the complaint to the Financial Ombudsman Service for free. There's no need to use a claims management company or law firm. Our guide on whether to use a claims management company explains the options.
For anyone who would prefer someone to manage the process, Mis-sold Expert can check the agreement and handle the complaint on the customer's behalf. If a claim is successful, our fee is 18 to 36% of the compensation recovered, including VAT. We explain our fees and charges before any decision is made.
It takes around 60 seconds to submit details.
Sources
- Financial Conduct Authority, FCA sets expectations for firms making car finance settlement offers, 3 November 2026
- Barclays, Barclays Partner Finance to make early settlement offers to some motor finance customers, 3 November 2026
- Financial Conduct Authority, Motor finance legal challenge to be heard in February 2027
- Financial Conduct Authority, FCA confirms motor finance redress scheme
