FCA Confirms 30th March Launch on Motor Finance Redress Scheme

The Financial Conduct Authority (FCA) has confirmed it will set out its approach to motor finance redress shortly after markets close on Monday, 30th March 2026.

In its latest statement, the FCA said it will provide further details following its earlier consultation on a compensation scheme in October 2025. This marks the first clear timeline for when you can expect a more definitive position.

While this is not the final outcome, it is a key step. The FCA is moving from review and consultation into setting out how any redress process could work in practice.

What this means for your PCP or HP agreement

If you have taken out a car finance agreement, especially a PCP or HP agreement, this update is directly relevant to you. The FCA has been looking at how commission structures were used between lenders and brokers, particularly where those arrangements may have influenced the interest rate you were offered.

In some cases, higher interest rates could have been linked to higher commission payments. The FCA’s review focuses on whether this led customers to pay more than they should have, without a clear explanation.

The upcoming announcement should clarify whether these issues will lead to a formal redress scheme and who may fall within its scope.

Understanding the FCA’s car finance redress scheme

A redress scheme is a structured process the FCA can use when it identifies widespread issues across a market. Instead of relying on individual complaints, firms can be required to review past agreements and correct any financial impact in a consistent way.

In this case, the scheme would focus on historic motor finance agreements where commission models may have affected the cost of borrowing. The aim is to assess whether customers were treated fairly and, where they were not, to put them back in the position they would have been in.

This approach is designed to be more efficient and consistent than handling complaints one by one.

What compensation could look like

Although full details are still to be confirmed, the FCA’s earlier consultation gives a clear indication of the likely direction.

The scheme is expected to cover certain agreements taken out before January 2021, when discretionary commission models were banned. Many PCP and HP agreements arranged through dealerships during that period may be relevant.

Firms may be required to review affected agreements themselves rather than waiting for you to complain. If you are impacted, you could be contacted directly with the outcome.

Any compensation would likely reflect the difference between what you paid and what you would have paid if the commission had not influenced the interest rate. Where appropriate, interest may also be added. Firms would need to explain these calculations clearly so you can understand how the figure has been reached.

Do you need to take action now

You do not need to take any immediate action before the FCA’s announcement on 30th March.

There is no requirement to submit a claim at this stage. However, it is sensible to keep hold of your finance documents, including your agreement, lender details, and the date you took it out. Knowing whether your agreement was PCP or HP will also help you assess your position once more information is released.

If you are unsure or need more information around your agreements, you can check them with Mis-Sold Expert.

What happens next after the FCA update

After 30th March, the FCA is expected to provide more detailed guidance on how the redress process will work. This should include confirmation of whether a scheme will go ahead and what firms will need to do.

If a scheme is introduced, it will take time to roll out. Firms will need to review large volumes of agreements and apply a consistent method when calculating any redress.

For now, the confirmed date gives you a clear point when more information will become available. After that, you should have a better understanding of whether your agreement may be affected and what steps, if any, you need to take.

How Mis-Sold Expert Can Help

Mis-Sold Expert helps you understand car finance and your rights in clear, practical terms. We explain how PCP, HP, and commission structures work so you can make informed decisions about your situation.

We do not provide legal or financial advice. We give you straightforward information so you can decide what to do next.

You can claim without using a claims management company; you can go to your finance provider and then to FOS, for free. Additionally, the FCA is introducing a free consumer redress scheme