Car Finance Claims: Can They Be Made on Behalf of Someone Who Has Died?

It’s an interesting question and Mis-Sold Expert has some thoughts;

Families are being told to check the car finance history of deceased loved ones after FCA guidance confirmed that eligible agreements held by people who have since died can still fall within its motor finance compensation scheme.

The FCA states that the scheme can cover agreements held by customers who have died. A representative or 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.

The amounts involved can be significant. The FCA estimates that 12.1 million car finance agreements are eligible under the motor finance compensation 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.

Phil Thorpe, Lead Claims Handler at Mis-Sold Expert, said:

“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.

“Crucially, don’t treat £829 as a guaranteed payout. That is simply the average figure estimated by the FCA for eligible agreements. The first step is always identifying whether an agreement existed and if it actually qualifies.”

What families can check

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.

Anyone dealing with the financial matters of a deceased person should take the following steps:

• Search old bank statements and email accounts for lender names or car finance payments.
• Locate documents relating to PCP or hire purchase agreements, vehicle registration details and dealership names.
• Contact the lender directly if the provider is known.
• Explain that you are acting on behalf of someone who has died and ask what evidence of authority the lender requires.
• Provide the deceased person’s full name, previous address, date of birth and any information you have about the finance agreement.

According to FCA guidance, lenders are likely to ask for a copy of the will or grant of probate to make sure that any compensation is paid to the right person.

Parts of the motor finance redress scheme remain suspended following legal challenges. While the suspension is in place, lenders do not have to calculate or pay redress under the affected parts of the scheme.

Firms must continue to comply with the rules that remain in force, including identifying relevant complaints and agreements. Certain opt-in invitations are currently subject to the suspension order. Consumers and representatives can still contact lenders, provide relevant information and make complaints directly to lenders free of charge.

Claimants do not need to use a claims management company or law firm.