The average payout for mis-sold car finance in the UK typically ranges between £1,000 and £5,000, depending on your agreement type, how much interest you were overcharged, and your financial losses. Some drivers may receive even more if the mis-selling caused long-term financial harm. If you suspect you’ve been mis-sold car finance, you could be entitled to compensation.
Have You Been Mis-sold Car Finance?
Over the past decade, car finance deals have become the go-to method for buying new and used vehicles in the UK. Personal Contract Purchases (PCPs) and Hire Purchase agreements (HPs) offer flexibility — but they’ve also come under scrutiny for mis-selling.
Many UK drivers are now discovering that they may have been mis-sold car finance — often without even realising it. If you were not fully informed about commissions, hidden fees, or if the deal wasn’t suited to your financial situation, you might be eligible for compensation.
Understanding Mis-sold Car Finance in the UK
Car finance mis-selling in the UK has become a major issue, particularly after the Financial Conduct Authority (FCA) investigated the practices of motor dealers and lenders. In 2021, the FCA banned “discretionary commission arrangements” where dealers could increase interest rates to boost their own commission.
This means hundreds of thousands of UK drivers may have paid more than they should have — and are now eligible to claim that money back.
How Much Compensation Can You Claim?
Now, let’s get into the numbers. The average payout for mis-sold car finance will depend on various factors, such as:
- The type of finance agreement (PCP or HP)
- The total interest overcharged
- Whether you paid unnecessary add-ons or fees
- How long the agreement lasted
- Your personal financial circumstances
Estimated Average Payouts:
| Scenario | Estimated Payout |
|---|---|
| Minor overcharge (simple PCP mis-selling) | £1,000 – £2,000 |
| Moderate mis-selling (hidden commission, unfair interest) | £2,000 – £4,000 |
| Serious mis-selling (long-term financial harm) | £4,000 – £10,000+ |
In some rare cases, payouts have exceeded £10,000, especially where the buyer was seriously misled or financially harmed over several years.
The FCA’s crackdown on commission abuse also means that claims from as far back as 2007 might still be eligible, depending on when you became aware of the issue.
Mis-sold Car Finance Claims Checker
Our mis-sold car finance claims calculator below estimates the level of compensation you may be able to reclaim for a mis-sold car finance agreement.
Add the value of your vehicle, the length of your agreement, and the interest rate you paid to the calculator below. Then, compare this against a rate that you may have been offered if you weren’t mis-sold.
Disclaimer : The Mis-sold Car Finance Claims calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If you need more help and clear understanding.
Signs You’ve Been Mis-sold Car Finance
Not sure whether your car finance deal was fair? Here are some red flags to watch out for:
- You weren’t told that the dealer received commission
- The interest rate seemed higher than expected
- The finance was pushed on you without explaining all options
- You were offered a deal you couldn’t reasonably afford
- No proper affordability checks were carried out
Even if you agreed to the deal at the time, the lack of transparency could make it legally invalid.
Why Does Mis-selling Happen?
The car finance industry has long relied on commission-based incentives, which gave dealerships motivation to sell you more expensive deals. In fact, before the FCA’s ban in 2021, dealers had full discretion to inflate your interest rate purely to increase their own earnings.
A 2025 BBC report revealed that some drivers were overcharged by up to £1,000 in interest, all because of these secret commissions. That’s why the FCA stepped in — and why consumers are now claiming compensation in huge numbers.
How to Start Your Claim
Making a claim for mis-sold car finance can feel overwhelming, but you don’t have to do it alone.
At National Claims, we help connect you with experienced solicitors who specialise in handling these cases. They’ll guide you through the process, help gather the necessary paperwork, and fight to make sure you receive every penny you’re owed.
Most importantly, you usually won’t pay anything upfront — many solicitors work on a no-win, no-fee basis.
People Also Ask:
1. What counts as mis-sold car finance?
Mis-selling happens when a car finance agreement is not explained properly or is based on misleading advice. For example, if the dealership didn’t tell you they earned a commission from the lender, or if you weren’t told about cheaper alternatives, that could be classed as mis-selling.
2. Can I claim compensation for car finance from years ago?
Yes. You can typically claim compensation for car finance agreements dating back up to six years from the date you realised it was mis-sold. Some older cases might still be valid depending on the circumstances, so it’s worth checking with a solicitor.
3. How long does it take to receive a payout for mis-sold car finance?
On average, successful claims can take between 8 to 16 weeks to settle. More complex cases may take longer, especially if they require additional evidence or legal intervention.
4. Do I need a solicitor to claim for mis-sold car finance?
While it’s possible to make a claim yourself, using a solicitor can increase your chances of success and ensure you receive the maximum compensation.
Final Thoughts: Don’t Miss Out on What You’re Owed
With so many UK drivers now discovering they were mis-sold car finance, the window to claim compensation is wide open — but it won’t stay open forever. The sooner you act, the better your chances of receiving a fair payout.
Whether you were sold an unfair deal, paid inflated interest, or weren’t told about commission, you have the right to get your money back.
Start Your Mis-sold Car Finance Claim Today
If you think you’ve been mis-sold car finance, don’t wait. National Claims is here to connect you with expert solicitors who can assess your case and help you claim what you deserve.
Contact National Claims today, and we will put you in touch with an expert solicitor who can guide you through the claims process.
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