PCP and HP Compensation: How Much You'll Actually Get Back (Real Numbers and Worked Examples)

The FCA confirmed its motor finance redress scheme on 30 March 2026, with £7.5 billion expected to be paid out across 12.1 million agreements. The average payout is £829 per claim, and because the average claimant has two eligible agreements, many people are looking at around £1,660 in total.

That average masks a huge range. Someone with a 2007 HP agreement paying high interest for five years could receive several thousand pounds. Someone who only had 18 months of payments on a post-2014 PCP deal might get a few hundred. Here's how to work out where you actually sit.

Who is eligible?

Your finance agreement must have started between 6 April 2007 and 1 November 2024. The scheme covers Personal Contract Purchase (PCP) and Hire Purchase (HP). Leased vehicles are not included.

You can still claim if you've fully paid off the deal, if you no longer own the car, or even if the car was repossessed. If you had multiple eligible agreements across different lenders, you may be due multiple separate payouts.

One category not covered: high-value loans, specifically amounts higher than 99.5% of other loans taken out in the same year. The scheme is designed for standard consumer finance, not premium or commercial deals.

What actually counts as mis-selling?

The FCA's scheme covers three distinct triggers, all based on non-disclosure. You had no way of knowing about any of these at the time.

Discretionary Commission Arrangements (DCAs): The dealer could increase your interest rate to earn a higher commission. This was hidden from customers and banned by the FCA in January 2021. According to data collected during the FCA's investigation, 57% of Black Horse customers who lodged a complaint were confirmed as having a DCA in their agreement.

High Commission Arrangements: The commission paid to the dealer was at least 39% of the total cost of credit and at least 10% of the loan amount. These cases qualify for the largest payouts under what the FCA calls the Johnson Remedy.

Contractual Ties: You were told you were being shown deals from multiple lenders, but in practice only one lender was considered, or one lender had first right to your business.

What are the two calculation methods?

The Hybrid Remedy (most people)

The majority of claimants will receive the Hybrid Remedy: a refund of the commission paid, plus an amount for estimated loss based on 17% of the interest paid (or 21% for loans made before April 2014).

Martin Lewis put it plainly: roughly £170 back for every £1,000 of interest you were charged. Your actual figure depends on your APR, loan amount, and how long you were making payments.

MoneySavingExpert's published worked example for a pre-2014 agreement: total repayable with a 21% reduction applied comes to £25,144, a difference of £1,488. The Hybrid Remedy takes the mean average of the commission refund figure (£650 in this example) and that £1,488, giving a final redress estimate of £1,069, before interest is added.

The Johnson Remedy (roughly 90,000 people)

Where the high-commission conditions are met, you receive the full commission the lender paid to the dealer, plus compensatory interest running from the date the agreement started.

A worked example: a £15,000 agreement where the dealer earned £3,000 in commission. You receive that £3,000, plus interest at Bank of England base rate plus 1% (minimum 3% per year). At 3% simple interest over 10 years, that adds approximately £900, bringing the total to around £3,900.

How does compensatory interest change the numbers?

Every payout, under both methods, earns compensatory interest from the date of the agreement. The rate is Bank of England base rate plus 1%, with a floor of 3% per year.

For older agreements, this addition is substantial. £500 of base compensation from a 2010 agreement accumulates approximately £240 in interest by 2026, adding nearly 50% to the base figure. For agreements from 2007 and 2008, the interest addition is proportionally even larger. This is why the FCA raised the minimum rate to 3%: agreements from 16 to 19 years ago would otherwise generate very little interest compensation.

Around one in three cases will see their payout capped. The FCA's principle is that compensation shouldn't leave you better off than if the mis-selling hadn't happened.

Cases where you'll get nothing

If your agreement was a genuine 0% APR deal, there is nothing to reclaim. The entire calculation is based on overcharged interest, so no interest means no compensation under this scheme.

If you only had 18 months of payments before switching to a different vehicle, your payout will be significantly lower than someone who paid for 48 months and then made the balloon payment at the end of a PCP deal. Time spent paying is the core variable.

What have the banks set aside?

Lloyds Banking Group (Black Horse) has set aside nearly £2 billion. FirstRand Bank (MotoNovo) has set aside £750 million. Santander has made three separate provisions totalling £640 million. Close Brothers has increased its provision to £320 million. Secure Trust Bank tripled its provision to £21 million in October 2025. Oodle Car Finance confirmed a £12.8 million provision in March 2026.

These are capital reserves held against confirmed regulatory liability, not estimates or PR gestures.

When will the money actually arrive?

The FCA's confirmed timelines under PS26/3 are legally fixed, but there's a complication.

If you complained before the scheme start date and your agreement ran from 1 April 2014 to 1 November 2024, your lender has until 30 September 2026 to confirm what you're owed. You then have until 31 October 2026 to accept or dispute the offer. If you accept, payment should arrive in November 2026.

For earlier agreements (6 April 2007 to 31 March 2014), lenders have until end of February 2027 to contact affected customers proactively. The absolute last deadline for anyone to make a claim is 31 August 2027.

As of June 2026, the FCA has confirmed there is still no fixed date for the legal challenge to be heard in court, and it does not expect any hearing before October 2026. The FCA had previously told lenders to prepare for a potential court decision in mid-November 2026. In practice, the mass redress scheme is unlikely to start moving money before then.

Should you use a claims management company?

Claims Management Companies are advertising heavily for motor finance claims. Some charge up to 30% of your payout as a fee.

On an £829 average payout, that's around £249 taken before you see anything. On a £3,900 Johnson Remedy case, you'd lose nearly £1,200.

You do not need a CMC. The FCA's scheme is designed to pay eligible customers automatically, and you can complain directly to your lender for free. If your lender rejects the claim, you can escalate to the Financial Ombudsman Service at no cost.

What to do right now

Check every car finance agreement you've had since April 2007. Your lender is legally required to contact you if you're owed money, but the deadline for proactive outreach on older agreements runs to February 2027. If they miss you, you have until August 2027 to claim yourself.

Gather your paperwork: the original credit agreement, any correspondence showing your APR and payment terms, and the name of the lender. That's enough to make a claim. You need your lender's complaints address and your agreement number, nothing more.