BMW increases UK motor finance scandal provision to £612 million

BMW Financial Services UK has increased its provision for the UK motor finance mis-selling scandal to £612 million for 2025, up from £206 million in 2024. This increase follows a Financial Conduct Authority (FCA) redress scheme involving approximately 12.1 million historic car finance agreements where commissions were not properly disclosed to customers between April 2007 and November 2024.

BMW’s provision is now larger than those set aside by Barclays (£430 million) and Close Brothers (£320 million), though it remains significantly lower than Lloyds Banking Group’s provision of nearly £2 billion. The company also set aside an additional £25.5 million for agreements falling outside the FCA’s proposed redress scheme that may still result in legal claims.

The financial impact has already affected BMW’s results, with its pre-tax result shifting from a £39 million profit in 2024 to a £139 million loss in 2025. The total scale of the FCA scheme is estimated to involve roughly £7.5 billion in compensation and £1.5 billion in administration costs, though ongoing legal challenges may delay payments and alter final costs.