FCA extends motor finance consultation deadline

The Financial Conduct Authority has provided a further update on its motor finance redress consultation, raising feedback that analysis of the extensive market-wide data is taking firms a while and therefore extending the consultation deadline until 12th December.

Final rules are now expected to be published in either February or March 2026.

Commenting on the upate, Shanika Amarasekara, CEO of the Finance & Leasing Association, said “The FCA’s decision to extend the consultation is a step in the right direction. This issue warrants a considered process, and while nine weeks is still short for such a complex and consequential proposal, it’s an improvement on the original six. Customers who rely on the largest point-of-sale market in the consumer credit sector deserve a considered process that leads to a robust redress scheme. A 6 week consultation would not have delivered that, and a badly designed remedy risks creating new problems rather than resolving old ones. ”

Richard Pinch, Senior Risk Director at Broadstone, said “The compensation scheme set out in the consultation paper will likely have a much greater impact than the sector expected and it appears the FCA have listened to lender’s calls for more time.

“For example, it is clear that collecting and analysing market data is already proving to be a challenging exercise for lenders demonstrating the immense complexity of implementing such a compensation scheme.

“The consultation has provoked concern throughout the motor finance market and it is likely that lenders and other firms representing the market will request significant changes to be made to the final rules which are now estimated to be published towards the end of Q1 2026.”