Is Blue Motor Finance Still Accepting New Dealer Business After Hodge Bank Rescue?
Hodge Bank’s pre‑pack rescue keeps Blue Motor Finance open for new business – what it means for dealers and redress claims.
Hodge Bank has reassured car dealers that Blue Motor Finance is ‘open for new business’ after completing a pre‑pack administration rescue.
What the rescue deal entails
Following an FCA warning that the lender had been operating at a loss for several years and could no longer meet its compensation liabilities, Blue Motor Finance was placed into administration on Thursday. Hodge Bank intervened, purchasing the brand, its operating structure and all staff through a pre‑pack sale that transferred the business into a new vehicle – Hodge MF Limited.
Continuity for dealers and brokers
The core message for the dealer and broker network is that the finance provider remains operational. Hodge MF Limited now runs Blue Motor Finance under the same name, and the bank has confirmed that the lender will continue to accept fresh dealer business.
What happens to existing liabilities?
While the brand, employees and day‑to‑day operations have moved to the new entity, the original Blue Motor Finance Limited retains its historic liabilities. This includes compensation obligations linked to the FCA’s motor‑finance redress scheme. Those liabilities will be administered by the joint administrators appointed to the insolvent company.
Hodge Bank has explained that the structure of the pre‑pack deal is designed to maximise the pool of assets that can be distributed to creditors, including customers with redress claims. Without the rescue, the lender would likely have proceeded to liquidation, which would have reduced the amount available for claimants.
CEO statement
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.”
He added that the immediate focus is on a smooth transition, maintaining high service standards for both customers and partners, and providing stability for the workforce.
Background to the administration
The administration followed months of speculation after reports emerged that Blue Motor Finance was facing a motor‑finance redress bill of more than £50 million. At the time, representatives for the finance sector dismissed the reports as misinformation, yet the FCA’s subsequent action confirmed the lender’s financial strain.
The regulator also noted that existing finance agreements would continue unchanged, but customers awaiting compensation were unlikely to receive the full amounts owed under the redress scheme.
What dealers should expect
Dealers can now resume submitting applications to Blue Motor Finance, now operated by Hodge MF Limited, with confidence that the business has the backing of a solvent parent. The bank’s involvement is intended to safeguard the dealer network from disruption and to preserve the credit facilities that many independent dealers rely upon.
For claimants with outstanding redress claims, the administration process remains ongoing under the original company’s administrators. Hodge Bank expects the pre‑pack arrangement to deliver a more favourable recoverable amount than a straight liquidation would have achieved.
Further information and resources
Dealers interested in the latest updates can follow the Car Dealer Podcast, join the breaking‑news WhatsApp group, or sign up for daily email bulletins. Additional reading includes the original reports on the administration and the redress bill.