How Much Can You Claim for PCP Mis-selling? Average Payouts Explained
The amount you can claim for mis-sold PCP car finance depends on several factors, but the FCA investigation has provided some guidance on what consumers have received. On average, customers affected by discretionary commission arrangement (DCA) mis-selling have been entitled to compensation of around £700, though amounts can vary significantly based on individual circumstances.
Key Factors That Determine Your Claim Amount
The Commission You Paid
Your main compensation is based on the discretionary commission you paid when you financed your car. This is typically the difference between the interest rate the lender offered you and the rate they actually charged. Many dealers were allowed to add discretionary commissions without properly disclosing this to customers, which is the basis for mis-selling claims.
If you paid a higher interest rate because of a hidden commission, you're entitled to get that back. The FCA identified that over 14.2 million PCP contracts could potentially be affected, affecting potentially hundreds of millions of pounds in redress.
Time Held and Interest
Your compensation also typically includes:
- The full amount of commission paid
- Interest on that amount (usually at the Bank of England base rate + 8%)
- This interest accrues from the date you paid the commission until you receive compensation
For example, if you were mis-sold a PCP deal in 2019 and paid £800 in hidden commission, by 2026 you could be entitled to significantly more due to 6+ years of interest accruing.
Total Outstanding Finance
Some lenders have paid compensation based on a percentage of the total finance provided, ranging from 5-15% depending on the severity of the mis-selling and the individual lender's settlement approach.
Real-World Examples
Case 1: Customer with £15,000 PCP deal, 3-year term. Hidden commission: £600. With interest accrued from 2020-2026: approximately £850-900 compensation.
Case 2: Customer with £25,000 PCP deal, 4-year term. Hidden commission: £1,200. With 5 years of interest: approximately £1,500-1,700 compensation.
Case 3: Customer who has already settled the agreement. Still eligible to claim if within 6 years of the original contract date.
Upper and Lower Bounds
Lower end: Customers with smaller finance amounts or shorter loan terms typically receive £300-500 in total compensation.
Upper end: Customers with larger PCP amounts, longer terms, or multiple vehicles financed may receive £1,500-3,000+ depending on how much commission was buried in their deal.
The FCA's estimates suggest the average across all affected customers is around £700, but this is just an average—many will receive more, some less.
Important Considerations
You Might Qualify Even If You've Paid Off Your Car
The key date is when you signed the original finance agreement, not whether you've finished paying. If you entered into the PCP agreement within the past 6 years and it wasn't properly disclosed, you can claim.
Lender-Specific Patterns
Some lenders have settled with significantly higher average payouts. For instance:
- Santander and Black Horse have paid substantial redress
- MotoNovo and Volkswagen Finance have different settlement approaches
- Each lender's approach to calculating compensation varies
Claims Management Costs
If you use a claims management company, they typically take 15-25% of your compensation as their fee. Alternatively, you can claim directly with the lender without losing a percentage—you keep 100% of what you're awarded.
Next Steps to Calculate Your Specific Amount
To get a more accurate figure for your situation:
- Find your original PCP agreement - look for the credit agreement documentation or lender statement from when you signed
- Identify the interest rate you were quoted vs. what you actually paid
- Calculate total finance cost - multiply monthly payment × number of payments, subtract the principal
- Check the timeline - confirm you're within 6 years of the original agreement date
Resources like MotorRedress can help you understand your potential claim amount without upfront charges—they can assess your specific situation and give you a realistic figure.
FCA Disclaimer
This information is based on guidance from the Financial Conduct Authority (FCA) regarding mis-sold car finance. Any compensation amounts mentioned are examples and educational information. Your specific claim amount will depend on your individual circumstances, the lender involved, and the specific terms of your agreement.
Summary: Most PCP mis-selling claims result in compensation of £300-1,500, with an average around £700. Your exact amount depends on the commission you paid, how long you held the finance, and which lender financed your car.