9:55 am, May 6, 2026
Blue Motor Finance is said to be ‘teetering on the brink of collapse’, with national media reports suggesting the firm is lining up administrators.
Sky News reported yesterday that the lender is facing a redress bill of over £50m, which has left it ‘scrambling to secure a rescue deal’.
The finance house is yet to officially respond, but Car Dealer understands that reps have told retailers that the claims are false.
In messages seen by Car Dealer, one finance manager even told account holders that Sky have ‘fallen foul to misinformation’ and suggested the rumours may have been generated by rival firms.
In its initial report, Sky News claimed that accountancy firm EY has been drafted in to help bosses put together a possible rescue plan and potentially oversee an insolvency process if no deal can be reached.
Insiders also told the news outlet that Blue has been left hunting for new financing after bank Shawbrook cancelled a ‘forward flow’ funding agreement earlier in the year.
Exclusive: Blue Motor Finance, which has lent more than £2.5bn and is backed by private equity firm Cabot Square Capital, is on the brink of collapse weeks after the City watchdog unveiled plans for a £9.1bn compensation scheme for mis-selling victims. https://t.co/R7etE1YGL0
— Mark Kleinman (@MarkKleinmanSky) May 5, 2026
The news comes just days after the FCA hit out at lenders who are planning to challenge its £9bn car finance redress scheme, claiming that the appeal will create ‘fresh uncertainty for millions’.
Mercedes’ and Volkswagen’s in-house finance providers are among the firms leading the challenge, which the financial regulator has vowed to ‘robustly defend’.
Car Dealer has approached Blue Motor Finance for comment.
