Car Finance Compensation UK 2026: How to Claim Your £829 Average Payout

The FCA confirmed its £7.5 billion car finance mis-selling scheme on 30 March 2026. If you had a car on PCP or HP finance between 2007 and 2024, you could be owed an average £829 — and you can claim completely free. Here is the full guide. FCA Confirmed 30 March 2026

The Car Finance Scandal — What Happened

Between 2007 and 2021, car finance dealers could use Discretionary Commission Arrangements (DCAs) — a system that let dealers secretly increase your interest rate to earn more commission from the lender, without telling you. For example: if you were quoted 6% APR, the dealer might have increased it to 9% so they could earn more commission — costing you hundreds or thousands more in interest over the term. DCAs were banned by the FCA in January 2021, but the damage was done on millions of earlier agreements. The Supreme Court ruled in August 2025 that these arrangements could be unfair, triggering the FCA's mass redress scheme — the biggest since PPI, which paid out £38 billion.

FCA Scheme — Key Facts April 2026

Are You Eligible? — The Eligibility Checklist

How Much Will YOU Get — The Calculation

The FCA's calculation method has two parts: Part 1 — Commission refund: The actual commission paid to the dealer is refunded. This varies by agreement but was typically 1-5% of the finance amount. On a £15,000 car with 3% commission, that's £450. Part 2 — Estimated loss: For agreements from April 2014: 17% of the total interest you paid. For agreements before April 2014: 21% of total interest paid. Example: If you paid £3,000 in interest over your PCP term, 17% = £510 estimated loss payment. Plus interest on compensation at Bank of England base rate + 1% (minimum 3% per year) from when you made the agreement to when you are paid. Total example: £450 commission + £510 estimated loss + interest = approximately £1,000+ total for a typical agreement. Some simple, lower-value cases may receive less. Around 90,000 highest-value DCA cases could receive significantly more.

How to Claim — Step by Step

Do NOT Use a Claims Management Company

The FCA car finance compensation scheme is entirely free to use directly. Claims Management Companies (CMCs) and solicitors advertising no-win-no-fee car finance claims will typically take 20-40% of your compensation as their fee. On an average £829 payout, that is £166-£332 you would lose unnecessarily. The FCA has confirmed: lenders must contact ALL eligible customers — even those who have not complained. If you do nothing, you will still likely be contacted by February 2027. However, complaining now means you are paid faster — potentially by October 2026 rather than late 2027. The free routes: complain directly to your lender; use MSE's free complaint tool; escalate to the Financial Ombudsman Service (free) if you disagree with the outcome.

What If You Cannot Find Your Old Agreement?

If you cannot find old finance paperwork, try these free methods: Equifax free car finance checker: Sign up for free basic account at equifax.co.uk — it shows all car finance agreements reported to Equifax since 2007. Not all agreements are on Equifax but most are. Your credit report: Experian, Equifax and TransUnion all hold records of finance agreements. Check all three free versions. DVLA: If you know the car's registration, the lender should be on the V5C logbook or accessible via DVLA. Contact the dealer: The original dealership may have records of the finance company used. Contact lenders directly: If you think you used a specific lender, contact them and ask for records under your data subject access rights (free, must respond within 30 days).

This article is for informational purposes only and does not constitute financial or legal advice. Always verify figures at GOV.UK and FCA.org.uk before acting. Data verified April 2026.