Car finance settlement offer: accept it or wait for the FCA scheme?

If your car finance lender makes you a settlement offer, you do not have to accept it. The FCA says you can take the money sooner, or wait for the legal challenge to the compensation scheme. Accepting is usually full and final: you keep the money, but you may not claim more later.

This guide explains who may get an offer, what accepting means, and how to decide.

Key takeaways

• The FCA said on 3 November 2026 that it supports lenders making settlement offers, if customers get no less than they would under the scheme.
• Offers are optional. Only some lenders will make them, and only to some customers.
• If you accept, the deal is full and final. You may not claim more later, and you cannot refer the offer to the Financial Ombudsman Service.
• If you do not accept, your complaint stays open under the scheme. Payments are expected to begin in 2027 if the scheme is upheld, and could be later if there is an appeal.
• You do not need a claims company or law firm. They may take up to 36% including VAT.
• The Financial Ombudsman Service is free if a complaint is later mishandled.

Why are lenders making settlement offers now?

The FCA's car finance compensation scheme is partly suspended because of legal challenges. The Upper Tribunal is due to hear them between 16 February and 3 March 2027, with a judgment expected in the following months. Until then, lenders do not need to calculate or pay compensation under the scheme.

Some lenders may choose to pay earlier. The FCA published a survey of motor finance customers who had complained or were thinking of it. Of those, 89% said they wanted the choice of an offer now. The FCA's expectations for lenders came out on the same day.

At the time of writing, the FCA's list names one lender: Barclays Partner Finance. It said it will make offers to some customers whose commission complaints it acknowledged on or before 1 October 2026. Not all of those customers will get an offer. The FCA says it will update its list, so check it for your own lender.

Who might get an offer?

The scheme is aimed at agreements made between 6 April 2007 and 1 November 2024 where the lender did not properly disclose certain arrangements. The FCA estimates an average of around £830 per agreement, but amounts vary.

An offer is a lender's choice. The FCA says that not all lenders are likely to make offers, and those that do may make them only to some customers. If you complained and hear nothing, that does not mean you are owed nothing. Lenders are still working through complaints.

If you have not complained yet, you can still complain to your lender directly, for free. See car finance commission refunds for who the scheme covers.

Accept or wait: what changes?

The FCA says that if you wait, and the scheme is upheld without an appeal, payments are expected to begin in 2027. If the judgment is appealed or the scheme is overturned in whole or in part, compensation could be delayed until 2028 or later.

The FCA's factsheet says that, depending on the outcome of the legal challenge, you could have been due more, less or no compensation. Accepting gives certainty. Waiting keeps your options open. Which one suits you depends on your own circumstances.

What to check before you decide

Checklist for any offer

• Does the letter explain how the amount was calculated and why you are owed it?
• Are the vehicle and agreement details correct?
• Does the amount show any caps the lender has used?
• Is there a set-off for money you still owe on the loan? The FCA says some lenders may pay only the remainder.
• Does it say what happens to your complaint if you accept? The terms will likely treat it as withdrawn.
• Do you have a deadline? Barclays Partner Finance says customers will have one month.
• Has the lender given you the FCA factsheet on settlement offers? Lenders must share it.

The FCA has not assessed your offer or your own circumstances. If you do not understand the offer, you can ask the lender to explain it, or get independent advice.

How to spot a fake offer

Scammers may pretend to be car finance lenders. The FCA's advice is:

• Do not share passwords, and do not give bank details unless you are sure who you are dealing with.
• A lender may ask for your sort code and account number to pay you. It should not ask for a fee.
• Check the lender is on the FCA's list of firms making offers.
• If you are unsure that a phone number is genuine, call the FCA on 0300 124 8899 and ask to be put through to your lender.

For more on warning signs, see debt advice red flags.

What if a claims company already acts for you?

You may have signed up without realising it. Check whether you signed with more than one firm, which firm you want, and what fees may apply. Tell your lender who should deal with your complaint. You can also tell the lender that you want nobody to act for you.

If you end a contract, the firm may charge a fee. The FCA says the fee should be reasonable and reflect the work done. Ask for a breakdown if the description is vague.

When and how to escalate

You cannot take the settlement offer itself to the Ombudsman. But other problems may still go there. If your lender ignores your complaint, miscalculates under the scheme, or treats you unfairly, complain to the lender first. If you disagree with the final response, you can go to the Financial Ombudsman Service. It is free and independent, and you keep all of any money it awards.

Complaints usually must be made to the Ombudsman within six months of the final response. Check the current time limits. For the complaint steps, read how to complain about a bank or insurer.

Sources: FCA, FCA sets expectations for firms making car finance settlement offers (3 November 2026); FCA, Car finance claims; FCA, FAQs for settlement offers on car finance complaints; FCA, Motor finance legal challenge to be heard in February 2027; Barclays, early settlement offers announcement; Financial Ombudsman Service, time limits. Last checked: 03.11.2026. This area is moving, so check the FCA's pages for the current position.

How HeyRefund can help

HeyRefund is a free tool. It helps you set out your agreement, your complaint and any offer in a clear timeline, and drafts a complaint for you to send yourself. It does not contact your lender for you, it does not give legal advice, and it is not a claims company. You can do all of this yourself for free.