Volkswagen Braces for £500m Hit from £9bn FCA Motor Finance Scheme

Sky News·29 Sep 2026·

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Summary · why it matters

Volkswagen is preparing to disclose a massive financial hit from the City watchdog's £9bn motor finance redress scheme, with its UK lending arm expected to reveal hundreds of millions of pounds set aside for compensation. Sky News has learnt that VW Financial Services has filed accounts at Companies House that will become public later this week, providing the first indication of the scale of the hit facing the owner of Audi, Seat and Skoda. Analysts said on Tuesday that based on provisions made by rivals including BMW and Mercedes-Benz, VW would have had to set aside at least £500m for compensation claims for the 2025 financial year, while previous estimates suggested the German giant's total bill could be in the region of £1.5bn. A spokesperson for Volkswagen Financial Services (UK) said the company has taken a robust and responsible approach to provisioning and would not comment on figures ahead of publication of its annual report. In a legal filing earlier this year, VW Financial Services said the FCA scheme would have a significant financial impact on VW FS, describing itself as the largest captive lender in the UK motor finance market. Parts of the FCA redress scheme have been suspended pending the outcome of appeals by a string of motor finance providers, with court hearings expected to take place in December or February.

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