7:15 am, August 3, 2026
Hodge Bank has reassured dealers that Blue Motor Finance is ‘open for new business’ after completing its rescue of the lender through a pre-pack administration deal.
The bank has confirmed that Blue Motor Finance’s brand, operations and employees have all transferred into Hodge MF Limited, ensuring the lender will continue supporting its dealer and broker network despite entering administration last week.
Blue Motor Finance was placed into administration on Thursday after the Financial Conduct Authority (FCA) said the lender had been running at a loss for a number of years and faced compensation liabilities it could no longer meet.
Hodge has now provided further details of the transaction, saying it acquired the business to preserve operations, protect jobs and provide continuity for customers, employees and dealer partners.
Importantly for car dealers, the bank confirmed that Blue Motor Finance, operated by Hodge MF Limited, remains open for new business.
However, while the business, brand and employees have transferred, Blue Motor Finance’s existing liabilities have not.
That means compensation liabilities, including those relating to the FCA’s motor finance redress scheme, remain with the original Blue Motor Finance Limited business and will continue to be managed by the joint administrators.
Hodge said the structure of the deal is expected to maximise the amount available for distribution to creditors, including customers with motor finance redress claims.
The bank added that without the transaction, Blue Motor Finance would have entered liquidation, resulting in significantly lower compensation being available for redress claimants.
Richard Saulet, CEO of Hodge Bank, said: ‘This transaction provides a pragmatic and responsible solution to a complex situation.
‘By acquiring the business through the pre-pack process, we have been able to secure continuity of operations, protect jobs and ensure that customers continue to be supported.
‘Importantly, this structure also maximises the value available to be distributed to redress claimants, delivering a better outcome than would otherwise have been possible.
‘Our immediate focus is on ensuring a smooth transition and maintaining high standards of service for customers and partners, while providing stability for employees.
‘Blue Motor Finance (operated by Hodge MF) remains open for new business, and we look forward to continuing to support its dealer and broker network.
‘We are committed to working constructively with all stakeholders as the business moves forward under new ownership.’
The update follows last week’s announcement that Blue Motor Finance had entered administration after years of losses and mounting compensation liabilities linked to the motor finance redress scheme.
The FCA said at the time that while existing customer finance agreements would continue as normal, customers owed compensation were unlikely to receive the full amount they were due.
The administration came just months after Car Dealer revealed reports that Blue Motor Finance was ‘teetering on the brink of collapse’ amid claims it faced a motor finance redress bill of more than £50m.
At the time, finance representatives told dealers the reports were based on misinformation, but the lender was subsequently placed into administration before being immediately sold to Hodge Bank.