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The FCA estimates that eligible customers will receive an average of £700 per agreement in compensation for hidden car finance commission. But that is an average across millions of claims of all sizes. Many customers — particularly those with large loans or agreements dating back to the early 2010s — could receive several times that amount.
When the FCA published the details of its proposed redress scheme in October 2025, the headline figure was £700. That number is accurate as a system-wide average, but it can be misleading as a guide to what you personally might receive. The range of potential payouts is extremely wide, and the factors that determine where you fall on that range are worth understanding.
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What Does the £700 Average Actually Mean?
The FCA's £700 estimate is calculated across all eligible agreements in the redress scheme: short agreements and long ones, small loans and large ones, agreements from 2007 and agreements from 2020. It is the midpoint of a distribution that stretches from very small awards on modest, recent agreements all the way to multi-thousand-pound awards on large, older agreements.
The figure also includes interest calculated from the date of overpayment to the date of compensation — which, for agreements taken out in 2007 or 2008, could represent 18 to 19 years of accumulated interest on the excess charge. This component alone can be larger than the original excess for old agreements.
In short: do not assume £700 is your number. Use the compensation calculator to get an estimate based on your specific agreement, and consider that the actual calculation will be done by your lender under FCA supervision.
What Factors Determine How Much You Receive?
1. The Size of Your Original Loan
The excess interest calculation starts with the principal loan amount. A DCA that added 3 percentage points to the rate on a £6,000 agreement will generate far less excess interest than the same rate differential on a £20,000 agreement. High-value PCP deals — common on newer cars — naturally generate larger compensation amounts.
2. The Interest Rate Differential
The gap between the rate you were actually charged and the rate you should have been charged (absent the DCA) is the single biggest driver of compensation size. The FCA's investigation found that the rate differential could be as little as 1 percentage point or as much as 8 to 10 points in egregious cases. Most were somewhere in between.
3. The Length of Your Agreement
Longer agreements accumulate more excess interest. A 48-month PCP will generate roughly twice the excess interest of an equivalent 24-month agreement, all else being equal.
4. How Long Ago the Agreement Was
Interest accrues on the excess charge from the date of each overpayment. An agreement from 2010 has been accumulating interest for over 15 years. Even a modest excess charge can grow substantially over that period. This is why some of the largest compensation awards are expected on older agreements.
5. Number of Agreements
Each eligible agreement is assessed separately. Customers who financed a series of vehicles over the 2007 to 2021 period — a new car every three years, for example — may have four or five separate claims. The total compensation across all agreements could be substantial.
Real-World Examples
Example A: A £10,000 HP agreement taken out in 2015, 48 months, DCA added 4 percentage points. Estimated excess interest: ~£800. With 11 years of accumulated interest on that excess: total award could exceed £1,400.
Example B: A £22,000 PCP agreement taken out in 2013, 36 months, DCA added 3 percentage points. Estimated excess interest: ~£1,200. With 13 years of accumulated interest: total award could exceed £2,500.
Example C: A customer with three separate PCP agreements across 2009, 2013 and 2018, each with a DCA. Total combined compensation across all three agreements could exceed £4,000.
Note: These are illustrative examples based on FCA methodology. They are not guarantees of individual outcomes.
How to Maximise Your Compensation
The compensation scheme is administered by lenders, but that does not mean you are powerless. There are practical steps you can take to ensure your claim is as strong as possible.
- Submit a formal complaint now, before the scheme launches. This prioritises your claim in the lender's processing queue.
- Request your historic finance documents. If you do not have them, submit a Subject Access Request to your lender. This ensures the calculation is based on the actual terms of your agreement.
- Claim for all eligible agreements. If you had multiple PCP or HP agreements in the eligible period, make sure each one is included in your complaint.
- Review the offer before accepting. Once you receive a compensation offer, review it carefully. If it seems low given the size of your loan and the likely rate differential, you have the right to dispute it.
Want an estimate of your specific payout? Use our free Car Finance Compensation Calculator.
