How Much Compensation Can I Get for a Mis-Sold Car Finance Loan?

Updated March 2026 to reflect the latest legal rulings on hidden commissions and FCA estimates.

When it comes to valuing a mis-sold car finance claim in the UK, several factors need to be considered. Compensation is generally aimed at covering the financial disadvantage caused by the mis-selling, particularly in cases involving Discretionary Commission Arrangements (DCAs). The FCA estimate that the average payout will be around £829 per claim through their scheme, but claims companies may seek to get more through the courts.

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You could be owed compensation if your car finance was involved in Discretionary Commission Arrangements (DCAs). The FCA scheme has an expected average payout of around £829. If you use a CMC for your claim, they may look to get you more than through the FCA scheme.

Our legal partners have achieved an average payout of £1,846.23 per car finance claim.

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How Is Compensation for a Car Finance Claim Calculated?

Calculating the compensation for a mis-sold car finance agreement involves a different approach compared to other types of loans.

This is because car finance loans are calculated from Interest Rate Differences: This is based on the difference between the interest rate you paid and the lowest interest rate that was available to borrowers in a similar position. If you were charged a higher rate due to a hidden commission or unfair lending practices, you might be eligible for compensation to bridge that gap. In our calculation ,we assume that the interest rate difference is either anything you paid over 5%, or half of the total interest paid for lower APR's.

It also includes Statutory Interest: In addition to the refund of overpaid interest or fees, you may also be entitled to statutory interest. This is an additional 8% applied to the amount of compensation, reflecting the time you were deprived of the funds.

What Are Discretionary Commission Arrangements (DCAs)?

Discretionary Commission Arrangements are a type of car finance deal where the broker or dealer sets the interest rate, which can include a hidden commission. These commissions incentivise brokers to offer higher interest rates to borrowers, often without the borrower’s knowledge. If your car finance loan included a DCA, you may have paid significantly more than necessary.

Recent legal developments mean that you could also have a case even if your agreement didn’t involve a DCA, as the courts are increasingly recognizing that all hidden commissions may be considered unfair.

Example of a Claim

Imagine you financed a car for £15,000 over four years. The broker set an interest rate of 10%, while the lowest available rate for someone with your credit profile was 5%. This means you would have paid around £2,000 more than someone receiving a 5% loan (the exact figure depends on how quickly you paid off the loan). If this difference was due to a DCA payment to the broker, you could claim back the overpayment plus 8% statutory interest.

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We are a claims management company and receive payments from our partnered firms for our services. You do not need to use a claims management company to make your complaint to your lender or the Financial Ombudsman for free.