What is the average pay-out for a PCP car finance claim?

The average payout for a PCP car finance claim will be £829 per agreement as part of the FCA’s official redress scheme. This is slightly more than originally estimated.

The final amount of compensation that will be paid out to eligible customers will vary according to the interest rate charged and the length of agreement.

Compensation will start to be rolled out later this year to the millions of affected customers who took out a PCP or HP car finance payment plan between 6th April 2007 and 1st November 2024. 

Agreements that qualify for compensation will have included unfair commission structures that pushed the interest rates up, benefiting the brokers.

As the final details of the redress scheme have now been announced, now is the time to claim.

If you’re unsure of the process, Claim-Smart can help. 

From checking for eligibility and tracking down missing paperwork to providing expert support on lender disputes, we have a specialist team ready to guide you through the process.

For more information, start your claim today.

How much is the average PCP claim pay-out?

The average PCP claim pay-out is £829 per agreement. If eligible, the final amount you’ll receive will be based on the value of the agreement, interest rate paid, and length of the agreement.

If you took out more than one agreement between 6th April 2007 and 1st November 2024, you’ll need to claim for each agreement separately.

This also means that your total compensation could be far more than the average.

As the scheme is estimated to cover around 12 million agreements, the total redress expected to be paid will sit around £7.5 billion. This figure is based on the FCA assuming 75% of affected customers will choose to take part in the scheme.

How is PCP car finance compensation calculated?

Compensation is based on what’s called the overcharge, plus interest. Overcharge is the difference between the interest rate given and what would’ve been a fair rate at the time.

For longer agreements, a customer naturally would’ve paid more over time therefore compensation might be slightly more.

Similarly, if your agreement didn’t run for as long as expected, your compensation may be slightly less.

As the final rules of the scheme have now been announced, all details around compensation have been confirmed. 

This includes a ‘fair commission’ assessment that will make some agreements exempt: 

• For agreements taken out before 1st April 2014, the agreement won’t be compensated if the total cost of commission was £120 or less.

• For agreements taken out after 1st April 2014, if the total cost of commission was £150 or less, it won’t be eligible for compensation. 

Has anyone been paid for a PCP car finance claim yet?

No, under the official FCA redress scheme, no one has been paid for a PCP car finance claim yet.

The scheme is still in the implementation period, with two parallel timelines for next steps based on when the agreement was taken out. 

Lets walk through the steps:

Scheme 1

This covers loans from 1st April 2014 to 1st November 2024. 

1. The implementation period for this is three months, ending 30th June 2026. 

2. After this date, lenders confirm whether compensation needs to be paid.

3. Then, customers have one month to accept or challenge the decision.

4. Redress is paid before the end of November 2026.

Scheme 2

This covers loans taken out between 6th April 2007 and 31st March 2014.

1. Implementation period is slightly longer, ending 31st August 2026.

2. Again, after this point lenders either approve or deny compensation.

3. Then, customers either accept or appeal.

4. Redress is due before the end of January 2027

It’s important to note that these timelines are only for submitted claims. If you haven’t put your claim in before the end of the implementation period, the timeline will be a lot longer.

Lenders are obliged to contact customers they believe have been affected, but they will prioritise compensating those who have already put their claim in.

That’s why the time to claim is now. While you don’t need a claims management company, such as Claim-Smart, to submit your claim, our specialist team can help speed up the submission process and provide an expert eye to help you navigate it with ease.

Plus, we operate on a no-win, no-fee basis*. So if your claim is unsuccessful, we don’t charge you a penny.

For more information and to kick start your claim today, get in touch.

How can Claim-Smart help me get a pay-out for a PCP car finance claim?

As the scheme has now officially launched, claims will start being assessed very soon.

As soon as the implementation period comes to an end - as soon as June 2026 for more recent agreements - lenders will start calculating and confirming compensation for affected customers. 

As £829 per agreement is the average pay-out figure for car finance claims, you could find yourself entitled to more based on how inflated your interest rate was and how long your payment plan lasted for.

Plus, if you have more than one vehicle, you can claim for each, increasing your pay-out even more. 

The FCA’s official redress scheme aims to make the claims process as simple as possible for customers to do alone. 

But when there’s multiple lenders across different agreements, missing paperwork, insolvent lenders and no time to figure it all out, a claims management company could be your answer.

At Claim-Smart we help customers every step of the way, so you have an expert on hand helping you manage the process. If you want to submit a claim but need a bit more help managing it, start your claim with us today.

* Please see our terms and conditions for our fee structure and cancellation terms.