FCA Confirms PCP Finance Compensation Averaging £830 Per Agreement

Millions of UK drivers are about to get money back. The Financial Conduct Authority has confirmed it’s pushing ahead with a nationwide redress scheme for customers mis-sold motor finance agreements — and the numbers are big.

PCP finance compensation is expected to average around £830 per agreement. Across roughly 12.1 million eligible deals taken out between April 2007 and November 2024, total payouts could hit £7.5 billion. That’s one of the largest financial redress programmes this country has ever seen.

So how did we get here?

The core issue: discretionary commission arrangements. Brokers and dealers could quietly bump up interest rates on finance deals to earn fatter commissions — and customers had no idea. No disclosure. No choice. Just a higher monthly payment they didn’t know was inflated.

The FCA investigated, found widespread failings, and decided a blanket scheme was the cleanest fix. Faster than individual court battles. Fairer than a postcode lottery of outcomes.

What you’d actually receive

The £830 average covers undisclosed commission plus a slice of the extra interest paid — and in some cases, additional interest on top to account for the time your money was tied up. Some people will get less. Some will get more, particularly where the FCA identifies more serious conduct failures.

Not a fortune for everyone. But real money for most.

When payments start

There’s a phased rollout. After final rules are published, lenders get roughly three to five months to get their systems ready. Payments are expected to begin later in 2026, with most claims wrapped up by end of 2027.

If you’ve already complained? You may hear back sooner. If you haven’t, lenders will be reaching out directly — though the FCA also encourages anyone who thinks they’re affected to get in touch with their lender themselves.

Do you need a claims firm?

Here’s where it gets worth paying attention to. The FCA has been clear: you can submit a complaint directly to your lender, for free. No middleman needed.

Claims management companies (CMCs) can charge up to 30% of whatever you receive. On an £830 payout, that’s roughly £250 gone before it reaches your account.

Some firms argue there’s value in the process — Locksly, for example, suggests they can “find agreements that the customer may not have known about, including those for family members,” and that there are “pros and cons” to managing a claim yourself versus using a firm. Fair enough. But the maths matter here. Thirty percent is a steep cut for paperwork you could handle yourself.

The bigger picture

This scheme doesn’t just hand out cash — it’s designed to do it consistently. Standardised assessment. Built-in safeguards. Limits on payouts in certain cases, because the FCA acknowledges some level of interest would always have been expected in any finance deal.

The motor finance industry has taken a hit to its reputation. This is the cleanup.

If you financed a car any time in the last 17 years, it’s worth checking whether you’re eligible. The money’s there. The process is free. The only question is whether you act on it.