Calculator Methodology for Car Finance Claim Calculator

1. Which scheme applies

The date your agreement was made decides everything else.

2. Whether the agreement is in scope

The calculator checks that:

• the agreement was hire purchase, personal contract purchase (PCP) or conditional sale for a motor vehicle, such as a car, motorbike, van or campervan. Leases (personal contract hire) are not covered;
• you lived in the UK when you took it out;
• commission was payable by the lender to the dealer or broker (the FCA asks whether it was payable, not whether it was paid);
• the amount borrowed was not above the high value limit for that year (table in section 8), unless the vehicle was built or adapted for a disabled driver or passenger;
• the agreement has not already been settled by you accepting redress, or decided on its merits by a court or the Financial Ombudsman Service.

Some older agreements may be out of time. In practice this mainly affects agreements involving high commission only, which ended before 26 March 2020, where the paperwork clearly said commission was payable. The calculator flags this case; your lender must explain its decision.

3. Whether there was a "relevant arrangement"

Redress is only due if at least one of these applied:

• Discretionary commission arrangement (DCA): the broker could set your interest rate, and earned more commission for a higher rate.
• High commission: commission was at least 39% of the total charge for credit and at least 10% of the amount borrowed.
• Tied arrangement: the broker had to offer the lender's finance first, or only that lender's finance.

These do not count as relevant arrangements:

• total commission of £150 or less (Scheme 2) or £120 or less (Scheme 1);
• an APR of 0%;
• a DCA where you were charged the lowest rate in the broker's range;
• a tie with a manufacturer's own finance company, at a franchised dealer, with visible shared branding. This exception is being challenged at the Upper Tribunal.

If none applies, the estimate is £0.

4. Which remedy applies

Commission repayment. If commission was very high (at least 50% of the total charge for credit and at least 22.5% of the amount borrowed) and there was also a DCA, a tie or both, the redress is all the commission plus compensatory interest, with no caps. The FCA expects about 90,000 consumers to fall here.

Hybrid remedy. In every other case, redress is the average of two figures:

1. 1
   Commission repayment: the commission, plus compensatory interest.
2. 2
   APR adjustment: the difference between what you paid and what you would have paid at a lower APR, plus compensatory interest on each payment's difference. The lower APR is your APR multiplied by 0.83 for Scheme 2 (a 17% reduction) or 0.79 for Scheme 1 (a 21% reduction). Where there was a DCA and the lowest rate the broker could have chosen was higher than that, the lowest rate is used instead.

Caps. The hybrid result is then capped at the lowest of:

• 90% of the commission repayment figure;
• the extra you paid compared with the market's 5th percentile APR for that year, plus interest;
• everything you paid above the amount borrowed, plus interest. This cap is used only if you enter the total you paid.

The FCA says the final amount is capped in about 1 in 3 cases.

Nil. If your APR was at or below the 5th percentile APR for the year your agreement was made (table in section 8), a hybrid case receives nothing, even with a DCA. The FCA estimates this applies to about 64,000 agreements.

5. Compensatory interest

Compensatory interest is simple interest at the annual average Bank of England base rate plus 1 percentage point, with a minimum of 3% in any year. The rates for each year are fixed in the rules, including projections for 2026 to 2028 (table in section 8). Consumers cannot challenge them.

• Interest runs from the date of each payment (or, for commission, from the start of the agreement) to the calculation date. The calculator uses today's date unless you choose another.
• The rules set rates up to 2028, so the calculator does not estimate beyond 31 December 2028.
• Days are divided by 365, or 366 in a leap year. The final rules do not say whether to count both the first and last day; we count both, as the FCA's own worked example in CP25/27 does.
• Every figure the calculator shows is rounded to the nearest penny. Workings are kept unrounded until then.

Part of any redress is interest, which is generally taxable. The calculator shows it separately (see section 7).

6. What you enter, and what we assume

Where we rebuild your payments, we use the standard repayment formula with a monthly rate of APR divided by 12, as the FCA rules specify, and assume the first payment was one month after the agreement started. The rules do not specify payment dates for this case, so this is our assumption.

Every assumption used is listed next to your result.

7. What the calculator cannot know

• Whether your lender will show the relationship was fair. The rules let lenders rebut the presumption of unfairness in some cases. The calculator assumes no rebuttal.
• The real commission, and whether there was a DCA or tie. Only your lender's records show these.
• Arrears. Your lender may deduct unpaid arrears on the same agreement.
• Earlier refunds. Any interest your lender has already refunded reduces the APR adjustment.
• Joint agreements, bankruptcy or an IVA. These can change who receives the money.
• Tax. Compensatory interest is generally subject to income tax, typically deducted at the basic rate before you are paid. We show the interest part so you can see it, but we do not calculate tax.

8. Constants the calculator uses

5th percentile APR by year the agreement was made (CONRED 6.4.7R and 5.4.7R; PS26/3 Table 7)

Compensatory interest rate by calendar year (CONRED 6.4.35R and 5.4.35R; PS26/3 Table 8)

High value limit on the amount borrowed, by year (CONRED 6.1.18R and 5.1.18R)

Agreements for more than £25,000 made before 6 April 2008 were not regulated and are outside the scheme.

9. How we test the calculator

Before any version goes live, it must reproduce, to the penny, the worked examples the FCA has published:

• the compensatory interest example in CP25/27 (Table 9);
• the payment differential example in PS26/3 (Chapter 12);
• the APR adjustment example the FCA gave alongside CP25/27.

It must also return the expected result for a set of test cases we built directly from the rules, covering a Scheme 2 hybrid case, a Scheme 1 commission repayment case, a case where the 90% cap applies, and a nil case at the 5th percentile APR. We do not compare our results with other calculators or with claims firms' figures.

10. Change log

Any correction that changed results will be listed here, with whether earlier estimates were too high or too low. See our editorial policy.

11. Sources

• FCA Handbook, CONRED 5.1, 5.2 and 5.4 (agreements from 1 April 2014)
• FCA Handbook, CONRED 6.1, 6.2 and 6.4 (agreements before 1 April 2014)
• FCA, PS26/3: Motor finance consumer redress scheme, 30 March 2026
• FCA, CP25/27 consultation, October 2025 (worked examples)
• FCA, Further information for firms, updated 27 August 2026
• FCA, Motor finance scheme partially suspended
• FCA, Car finance complaints
• Supreme Court, Hopcraft, Johnson and Wrench [2025] UKSC 33, press summary, 1 August 2025
• Financial Ombudsman Service, Complaints about car finance commission

12. Report a problem

If you think the calculator has gone wrong, email contact@carfinanceclaimcalculator.uk with the figures you entered (no personal details needed) and the result you saw. We will check it against the rules and reply.

By using Car Finance Claim Calculator you acknowledge that its results are estimates under the FCA's published rules, as described on this page and in our disclaimer.