Motor finance scandal pushes auction towards Startline

One of Britain's biggest independent car finance providers is being put up for sale as the industry awaits the outcome of appeals against the City watchdog's £9bn compensation scheme.

Sky News has learnt that Startline Motor Finance is poised to change hands after bankers from Stephens were brought in to handle an auction.

Startline is owned by The Baupost Group, a large US-based investment firm.

An auction of the business is expected to kick off before the end of the year.

News of Startline's impending sale comes days after Volkswagen Financial Services confirmed it was setting aside £725m to compensate consumers who were mis-sold policies.

Startline's latest accounts, for 2025, show no new redress provision last year after a £28.2m hit the previous year.

The motor finance scandal - one of the biggest since PPI emerged 15 years ago - has triggered appeals from a number of finance providers, including VW.

The prospect of a widespread legal battle had appeared to recede after the Finance & Leasing Association (FLA), whose members lent £55bn last year to help consumers buy cars, performed an eleventh-hour U-turn and abandoned plans to challenge the regulator.

Since then, at least one sizeable player in the market, Blue Motor Finance, has collapsed into insolvency proceedings.

Startline Motor Finance has been contacted for comment.

(c) Sky News 2026: Motor finance scandal pushes auction towards Startline