Can you claim car finance compensation for someone who has passed away? (UK)

29 September 2026 · Inherit Vault

Yes. The Financial Conduct Authority's car finance compensation scheme covers people who have since passed away. So if your mum, dad or partner had car finance at any point from 2007 to 2024, their estate may be owed money. There's one big catch right now. Payments are on hold while the scheme is challenged at a tribunal.

What the scheme is about

The FCA says many lenders didn't properly tell customers about how the car dealer or broker was paid. That broke the law and the FCA's rules at the time. So it set up a scheme to pay people back. It covers finance for a car, motorbike, van or campervan taken out between 6 April 2007 and 1 November 2024. That includes hire purchase and Personal Contract Purchase, or PCP. The FCA estimates that around 12.1 million agreements are eligible, which is 37% of those made at the time.*

Which deals it covers

The key is what the customer wasn't told. The FCA lists a few arrangements between the lender and the broker. One let the broker push up the interest rate to earn more commission. Another is a high commission, of at least 39% of the cost of credit and 10% of the loan. A third is a tie where the broker only used one lender. You don't need to work this out yourself. The lender has to tell you whether any compensation is owed, and how much.

When it won't apply

There are some clear exclusions. The scheme doesn't cover Personal Contract Hire, which is leasing. It doesn't cover a case already decided by the Financial Ombudsman or a court. It also doesn't cover anyone who has already accepted compensation. Agreements over £25,000 are left out if they were taken out before 6 April 2008, or were for business use. Very large loans are left out too. The FCA also treats a deal as fair if no interest was charged. The same goes if the commission was £120 or less before 1 April 2014, or £150 or less after that.

What the FCA says about people who have passed away

This is the part families need. The FCA says the scheme covers agreements held by customers who have since passed away, so their beneficiaries may be able to claim. If a lender learns that a customer has passed away, the FCA expects it to take reasonable steps to contact their representatives or beneficiaries. It'll ask if they want to take part. You don't have to wait for that letter. You can complain directly to the lender.

How to claim for them

The FCA says to use your own details, but make it clear you're claiming for someone else. Give as much as you can about the person. That means their name, address and date of birth, and any car finance details you know. The FCA says the lender is likely to ask for a copy of the will or the grant of probate. That's so the money is paid to the right person. If probate is still going through, our post on how long probate takes will help you plan.

Finding the lender

You may not know who the lender was. The FCA suggests checking old bank statements, or asking the dealer who sold the car. It also suggests checking their credit file. The Equifax Car Finance Checker app includes most car finance records back to 2007, according to the FCA. The FCA has a list of lenders with contact details and template letters. Our cars and car finance list has the bereavement contacts for lenders such as Black Horse and Santander Consumer Finance.

The legal challenge, and what it means for timing

After the scheme launched, it was challenged, and parts of it have been suspended. The Upper Tribunal will hear the case on 14 to 18 December 2026, or 16 to 26 February 2027.* Until it's over, lenders don't have to work out or pay compensation. If the scheme is upheld and there's no appeal, the FCA expects payments to start in 2027.* It's still worth complaining now, as the FCA says that's the best thing you can do.

Some people will hear back sooner, to be told they're not owed anything. If the agreement began on or after 1 April 2014, and the complaint was made by 30 June 2026, the lender should reply by 18 November 2026.* If it began before 1 April 2014, and the complaint was made by 31 August 2026, the reply is due by 18 January 2027.* The FCA says there are a few exceptions, so silence doesn't always mean money is owed.

How much it might be

The FCA says people who get compensation will receive an average of around £830 per agreement.* Some will get more and some less. Once the lender replies, you'll have a month to accept it or challenge it. If you accept, the lender then has a month to pay. If you're unhappy, you can go to the Financial Ombudsman Service, which is free.

You don't need a claims company

The FCA is blunt about this. You can complain for free without a claims firm or a law firm. If you use one, you might pay up to 36% of the compensation in fees, including VAT.* It also warns about scams. Only share bank details once you're sure who you're dealing with.

What about the car itself?

The compensation claim is separate from the car. If the car is still on finance, that's a different job. Our post on car finance and PCP when the borrower passes away explains the options. The DVLA and insurance side is in our guide to what happens to a car.

Money like this is easy to miss, because nobody thinks of an old car deal as part of the estate. A short note of any finance agreements, even finished ones, gives your family somewhere to start. Inherit Vault is a quiet place to keep that kind of detail for later.

*Correct at the time of writing, 29 September 2026. These can change, so check with the organisation before you rely on them.

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