Families are being encouraged to check the car finance history of deceased loved ones after guidance from the Financial Conduct Authority (FCA) confirmed that eligible agreements held by people who have since died can still fall within its motor finance compensation scheme.
The scheme covers certain motor finance agreements taken out between 6 April 2007 and 1 November 2024 where commission was payable by the lender to the broker and the relevant eligibility criteria are met.
This includes hire purchase agreements such as personal contract purchase (PCP), while personal contract hire (PCH) leasing is excluded. A beneficiary may be able to pursue the matter on behalf of the deceased customer’s estate, provided they can show the appropriate authority to act.
Where a lender is required to contact a customer and knows that they have died, FCA rules require the firm to take all reasonable steps to communicate instead with a personal representative of the estate or its beneficiaries.
Phil Thorpe, lead claims handler at Mis-Sold Expert, explained: “Bank accounts, pensions, insurance and property are usually the first things families look for when managing an estate. One thing that can easily be overlooked is an old PCP or hire purchase agreement, particularly if the car was sold years before the person died.
“Clearly, the FCA states that eligible agreements can still be covered by the scheme after the customer has died. Families shouldn’t automatically assume that this is no longer possible, but the estate representative would need to prove they have the authority to act.
“I’d recommend searching through old finance documentation, bank statements, emails, vehicle records and dealership details. Someone who changed their car every three to four years may have entered multiple finance agreements during the period covered by the scheme.”
The FCA estimates that 12.1 million car finance agreements are eligible under the scheme. Average redress is estimated at £829 per eligible agreement, with total estimated redress liabilities reaching £10 billion if there is 100% uptake.
For example, if a deceased relative had two eligible agreements and both resulted in the FCA’s estimated average redress, that would equal £1,658. However, each case will be assessed individually and the amount could be higher, lower or zero.
A total of 239,091 probate grants were issued in England and Wales in 2025, according to Ministry of Justice figures, although the data does not show how many estates included an eligible car finance agreement.
