How Much Could You Get from a PCP Claim? Realistic Expectations
One of the first questions anyone asks when they hear about the motor finance mis-selling scandal is: how much is my claim worth? MotorRedress (www.motorredress.co.uk) has helped hundreds of drivers assess their potential compensation, and this article breaks down the calculation methodology, the factors that influence your payout, and how to set realistic expectations before you submit a claim.
The Headline Figure: £700 Average
The FCA's own analysis puts the average compensation amount at approximately £700 per affected contract. Total industry liability is estimated at £8.2 billion across 14.2 million affected agreements. These figures come from the FCA's 2021 review and its subsequent consultation paper CP25/27.
However, £700 is an average — meaning many claimants will receive less, and many will receive significantly more. The range in realistic individual claims runs from under £200 to over £5,000, depending on several variables discussed below.
What the Redress Calculation Actually Measures
The compensation in a successful PCP or HP claim is designed to put you in the position you would have been in if the secret commission had not been paid. Under the methodology proposed in CP25/27 and consistent with the Johnson v FirstRand [2025] UKSC 33 ruling, the calculation has two components:
Component 1: The Commission Itself (Disgorgement)
The dealer received a commission from the lender. Because this commission was secret — paid without your fully informed consent — you are entitled to its return. This is the disgorgement remedy.
Commission amounts varied by lender and agreement size, but were typically in the range of £150 to £800 per agreement, often structured as a percentage of the interest income the lender expected to earn.
Component 2: Excess Interest Paid
The dealer set your interest rate above the minimum available rate in order to earn a larger commission. You are therefore entitled to recover the additional interest you paid as a result of the inflated rate — i.e., the difference between what you actually paid and what you would have paid at the minimum rate.
This is often the larger component for agreements with high credit balances or long terms. On a £15,000 PCP agreement over 48 months with an interest rate 3 percentage points higher than the minimum, the excess interest could easily exceed £1,000.
Component 3: Interest on the Redress Amount
On top of Components 1 and 2, you are entitled to 8% simple interest per annum from the date each payment was made to the date of redress. This restitutionary interest reflects the time value of money you were deprived of.
For agreements written in 2012–2015 — which are now 10–14 years old — this interest component alone can add 80–112% to the base redress figure. An agreement with £600 in base redress from 2013 would attract approximately £600 × 8% × 12 years = £576 in interest, bringing the total to around £1,176.
Factors That Increase Your Claim Value
1. Larger Loan Amount
The commission and excess interest are typically calculated as a function of the total credit advanced. A £25,000 PCP on a new premium vehicle generates a larger base for both components than a £6,000 PCP on a used supermini.
2. Higher Interest Rate Differential
If your dealer set the rate near the top of the permitted range, the interest differential will be larger. Rates under DCAs could be anywhere from 5% APR to over 15% APR for the same borrower profile — the gap between what you were charged and what you could have been charged matters enormously.
3. Multiple Agreements
Many car owners change their vehicle every 2–3 years on PCP, meaning they may have had 3, 4, or even 5 qualifying agreements between 2007 and 2021. Each agreement generates a separate claim. A driver with four £700-average claims has a potential total of £2,800 — plus restitutionary interest on each.
4. Agreement Date
Earlier agreements attract more restitutionary interest. An agreement from April 2007 could attract up to 19 years of 8% simple interest by the time redress is paid in 2026–2027.
5. Agreement Term and Monthly Payment Level
Longer agreements mean more monthly payments, each of which contained an inflated interest component, and each of which attracts restitutionary interest from its payment date. A 48-month agreement generates more individual payments than a 24-month one.
Factors That Reduce Your Claim Value
1. Low Credit Balance
A small PCP on a low-value used car generates smaller absolute commission and excess interest figures, even if the percentage overcharge was identical to a larger agreement.
2. Low Interest Rate Differential
If your dealer happened to set a low rate (perhaps because you negotiated hard or the market was competitive), the excess interest component may be modest.
3. Short Agreement Term
Fewer months of inflated interest payments means a smaller excess interest figure.
4. Agreement Was Not Under a DCA
Some agreements — particularly direct lending products taken without a dealer intermediary — were not subject to DCA arrangements. If you arranged finance directly with a bank (rather than through a dealership), your agreement may fall outside the scheme's scope.
Real-World Calculation Example
Let's work through a concrete example.
The Agreement:
- Vehicle: 2016 BMW 3 Series
- Finance: PCP with Black Horse
- Total credit: £22,000
- Term: 48 months
- Interest rate charged: 9.9% APR
- Minimum available rate: 6.5% APR
- Agreement date: March 2016
Excess Interest Calculation:
- Interest at 9.9% over 48 months on £22,000 (simplified): approximately £4,620
- Interest at 6.5% over 48 months on £22,000 (simplified): approximately £2,996
- Excess interest: approximately £1,624
Commission (estimated):
- Black Horse DCA commission on this agreement type: approximately £550
Restitutionary Interest (8% simple, ~10 years to 2026):
- Base redress: £1,624 + £550 = £2,174
- 8% × 10 years = 80% uplift
- Restitutionary interest: £1,739
Estimated total: approximately £3,913
This is a stylised example — actual calculations require the specific terms of your agreement — but it illustrates why higher-value PCP agreements on premium vehicles generate significantly larger claims than the average.
Claims Management Company Fees
If you use a regulated CMC or solicitor to pursue your claim, they will deduct a success fee from your compensation. Under CMCOB rules, CMCs are subject to a fee cap:
- Maximum fee: 30% of the net redress amount (including VAT)
- No win, no fee is the standard arrangement
On a £3,913 gross payout, a 30% CMC fee = £1,174, leaving you with £2,739. On an average £700 claim, a 30% fee = £210, leaving you with £490.
You can pursue the claim yourself — directly to the lender and then to the Financial Ombudsman Service — at no cost. The trade-off is time and expertise.
When Will You Receive Payment?
Under the FCA's proposed timeline, the formal redress scheme is expected to open in early 2026. From the point the scheme opens, lenders are expected to process claims within a defined period. Based on the PPI precedent, expect:
- Simple cases (clear DCA, straightforward calculation): 4–8 weeks after scheme opening
- Complex cases (multiple agreements, disputed interest differentials): 3–6 months
- Contested cases (FOS escalation or court proceedings): 12–24 months
Should You Accept the First Offer?
Not necessarily. Lenders have an interest in settling at the lower end of the reasonable range. Under the Supreme Court's ruling in [2025] UKSC 33, the disgorgement remedy entitles you to the full commission, not a discounted or averaged figure. If a lender's offer does not account for restitutionary interest, or uses an estimated rather than actual commission figure, it may be worth challenging.
Conclusion
The question "how much will I get?" has no single answer, but the evidence suggests that for anyone with a medium-to-large PCP agreement from the 2010s, the figure is likely £500–£2,000, and for multiple agreements or early agreements with large interest differentials, it can be considerably more. The £700 average masks a wide distribution, and the restitutionary interest component means that older claims are worth more today than they would have been even two years ago.
For a personalised estimate based on your actual agreements, visit MotorRedress.
This article is for educational purposes only. Compensation amounts vary. Eligibility criteria apply.
Originally published on MotorRedress
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