The Numbers Are In
After months of anticipation, the Financial Conduct Authority has put a figure on it: the average car finance compensation payout will be approximately £830 per eligible agreement. Across 12.1 million qualifying PCP and HP deals taken out between April 2007 and November 2024, that represents billions in total payouts that lenders will be forced to hand back to consumers.
Martin Lewis, the MoneySavingExpert founder who has been banging this drum for months, called it "one of the biggest consumer wins in a generation." He's not wrong. If you bought a car on finance in the last seventeen years, there's a decent chance someone was making money off your deal that they shouldn't have been.
What Actually Happened
The issue centres on Discretionary Commission Arrangements — DCAs — where car dealers were allowed to set the interest rate on your finance deal and pocket the difference as commission. The higher they set the rate, the more they earned. The FCA found this created a massive conflict of interest, because the person selling you the finance had a direct financial incentive to make it more expensive.
This wasn't a niche problem affecting a handful of dodgy dealers. It was industry-wide, systematic, and affected millions of agreements over nearly two decades. The Supreme Court confirmed it was unlawful, and the FCA has now built a compensation framework to address it.
How to Claim (Without Paying Anyone a Fee)
This is the critical bit, so pay attention: you do NOT need a claims management company. You do NOT need a solicitor. Every template, guide, and tool you need is available for free on MoneySavingExpert, the FCA website, or MoneyHelper. Anyone asking you to pay a percentage of your compensation is taking money you don't need to give them.
The scheme opens June 30, 2026, for agreements made after April 2014, and August 31 for earlier ones. If you've already complained, you'll be prioritised. If you haven't, submit a complaint now using the free templates — it costs nothing and gets you in the queue ahead of the rush.
Check your old bank statements for direct debits to car finance companies, or pull your credit report to identify past agreements. If you had PCP or HP finance on a car in the last seventeen years, it's worth ten minutes of your time to find out.