Blue Motor Finance sold to Hodge Bank in pre-pack administration

Blue Motor Finance Limited has entered administration and sold its operating business to Hodge Bank in a pre-pack transaction that preserved 168 jobs but left historic motor finance compensation liabilities behind in the insolvent company.

Simon Edel, Alan Hudson and Richard Barker of EY were appointed joint administrators on 30 July 2026 by the company’s directors. The business and most of its assets were sold immediately afterward to Hodge MF Limited, a wholly owned subsidiary of Hodge Bank.

The transaction transferred Blue Motor Finance’s brand, operations, loan-origination and servicing platform, as well as all 168 employees, to Hodge. The purchaser will continue offering used-car finance through the company’s existing dealer and broker network, although Hodge expects to discontinue the Blue Motor Finance brand within six months.

Blue Motor Finance provided loans to consumers purchasing used vehicles, including borrowers unable to access mainstream credit. Hodge had funded the lender under a forward-flow arrangement since 2023 and had been providing additional funding and liquidity while the company considered its strategic options.

The Financial Conduct Authority said Blue Motor Finance had operated at a loss for several years and faced significant compensation liabilities it could not meet. Those liabilities, including potential claims under the FCA’s motor finance consumer redress scheme, remain with Blue Motor Finance Limited in administration and did not transfer to Hodge.

The FCA warned that affected customers are unlikely to receive all compensation owed to them and that the Financial Services Compensation Scheme is unlikely to be able to consider a claim against Blue Motor Finance.

More than 100,000 existing customers will continue to have their loans serviced through Blue Motor Finance’s existing channels and should maintain their current payment arrangements. Their contracts remain with the company in administration, while Hodge MF handles day-to-day servicing on its behalf. New lending will be originated by Hodge MF rather than the insolvent company.

Hodge was advised by Fenchurch Advisory Partners, Burges Salmon and Deloitte. Blue Motor Finance was advised by EY-Parthenon and Slaughter and May.