FCA confirms Blue Motor Finance administration as joint administrators take control of firm affairs
Blue Motor Finance administration has begun after the Financial Conduct Authority (FCA) confirmed that Blue Motor Finance Limited (BMFL) was placed into administration on 30 July 2026. The motor finance lender entered administration after facing significant compensation liabilities that it could not meet.
The FCA confirmed that Simon Edel, Richard Barker and Alan Michael Hudson of Ernst & Young LLP were appointed as joint administrators. They are now responsible for managing BMFL while it remains in administration and will contact affected customers regarding the next steps.
BMFL, which operated as a motor finance lender under firm reference number 737682, had been running at a loss for several years and faced compensation liabilities that contributed to its financial difficulties.
For solicitors advising consumers, the key point is that existing customer agreements remain active. BMFL is no longer lending, but outstanding loan agreements remain in place and will continue to be serviced by the firm in the short term. Customers should continue making payments as usual unless they receive further instructions.
The FCA also confirmed that BMFL remains liable for compensation it owes, including obligations arising under the FCA’s motor finance compensation scheme. However, customers owed compensation are unlikely to receive the full amount owed. The joint administrators will determine how many customers are affected and the level of compensation available.
The regulator said it is working with BMFL and the joint administrators to support appropriate outcomes for customers owed compensation. It also noted that alternative options could have reduced the likelihood of any redress being paid.
The FCA confirmed that the Financial Services Compensation Scheme (FSCS) does not generally cover consumer credit lenders. As a result, compensation owed under the motor finance compensation scheme will not be covered by the FSCS.
Customers who have complaints or claims against BMFL will be contacted by the joint administrators. Those seeking further information about how complaints and claims will be handled have been advised to contact the administrators directly.
The FCA has also provided guidance for customers whose loans were sold on before the end of their fixed term. In such cases, the purchaser may now be responsible for administering the compensation scheme. Original lenders and debt purchasers must cooperate, including by sharing information needed to meet their obligations.
The regulator warned customers to remain alert to possible fraud attempts. Anyone receiving unexpected contact from individuals claiming to represent BMFL, the joint administrators or the FCA should end the call and contact the relevant organisation directly.
The FCA also confirmed that customers do not need to use a claims management company or law firm to make a complaint or seek compensation through the motor finance compensation scheme. Customers can submit complaints themselves free of charge, while claims management companies or law firms may charge fees of up to 36% including VAT from any compensation recovered.
The administration follows the FCA’s wider work on motor finance compensation. The regulator said BMFL’s financial difficulties existed independently of the compensation scheme, while the scheme was introduced after courts found firms had acted unlawfully and owed compensation to consumers.