Blue Motor Finance sold in pre-pack administration deal to Hodge MF

Blue Motor Finance (BMF), a motor finance lender specialising in the used car market, has collapsed into administration but has subsequently been bought in a pre-pack deal by Hodge MF, which will continue to operate the business under new ownership.

BMF, which was backed by Cabot Square Capital, provided finance both directly and through a nationwide network of introducers, lending £2.5bn to more than 250,000 customers. However according to the Financial Conduct Authority (FCA) “the firm had been running at a loss for a number of years and faced significant compensation liabilities it could not meet.”

On 30 July 2026, Simon Edel, Alan Hudson and Richard Barker from EY were appointed as joint administrators, and shortly afterwards a sale of the business and the majority of the company’s assets was completed to Hodge MF.

The business is continuing to trade as Blue Motor Finance, and all 168 employees have been TUPE transferred.  The FCA confirmed that all outstanding loan agreements remain in place and will continue to be serviced by BMF in the short term, and consumers are advised to continue to make payments as usual.

Any new loans and any new loan originations will now be provided by Hodge MF. Debts incurred by the company before the joint administrators’ appointment will rank as unsecured claims and the joint administrators will be in contact with all known creditors regarding next steps.

Redress scheme

Unconfirmed reports earlier this year, which BMF challenged as inaccurate, claimed the company could be facing a motor finance redress bill of more than £50m. BMF remains liable for any compensation it owes, including under the FCA’s scheme.

In a statement the FCA said: “We are engaging with BMF 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 BMF 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.”

Law firm Slaughter and May which advised BMF on the sale of its business, said: “The sale of the business to Hodge Bank secures its future as a going concern, with the business, its brand, operations and staff transferring to Hodge Bank, and maximises the value available for distribution to motor finance redress claimants.”