A UK car finance firm has collapsed into administration, after being in business for over a decade. Blue Motor Finance Limited was a motor finance lender that had been operating at a loss for a number of years.
It went into administration on July 30 and is no longer lending, but all outstanding loan agreements remain in place and payments will continue as usual. Simon Edel, Richard Barker and Alan Michael Hudson of Ernst & Young LLP were appointed as joint administrators.
Blue Motor Finance remains liable for all compensation it owes, including under the Financial Conduct Authority’s motor finance compensation scheme for those who were mis-sold car finance between 2007 and 2024.
The FCA said: “We are engaging with BMFL and the joint administrators to ensure the best outcomes for customers who are owed compensation. However, customers are unlikely to receive all the money they’re owed.
“We know this will be disappointing. Having become aware that BMFL was in financial difficulty, we have worked to make sure that the firm’s decisions secured the best outcome for redress consumers. Alternative options would have reduced the likelihood of any redress being paid.”
All customers should remain alert to the possibility of fraud. If customers get an unexpected phone call from someone claiming to be from BMFL, the joint administrators or the FCA, end the call and contact the relevant party directly.
This comes after UK business administrations surged by 41% in January 2026, driven by high-street failures, rising wages, weaker consumer spending, and higher operating costs.
Official Insolvency Service statistics show 151 companies entered administration in January, representing a 14% increase compared to January 2025.
Sarah Rayment, managing director and global co‑head of restructuring at Kroll, said: “The key question at this point in the year is whether distress and insolvencies will continue to rise given the pressures facing UK businesses. The reality is that every sector will face headwinds this year.”
Todd Davison, managing director at Purbeck Insurance Services, said business failures can also affect company directors personally.
“Many directors will have signed personal guarantees to secure loans, overdrafts or trade finance,” he said, warning that failed guarantees can put personal assets, including property and savings, at risk.
Other brands that have gone into administration this year include National Car Parks (NCP), which has been in business for almost 100 years, and Denby Pottery, which has been trading since 1809 and is known worldwide.
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