Average Refund Amounts: What the Early Data Tells Us

While no two claims are identical, patterns are emerging from the early settlements and Ombudsman decisions. Understanding these can help manage your expectations.

The Three Components of a Refund

Your total refund isn't just one number; it's usually made up of three parts:

1. Overpaid Interest: The difference between the rate you paid and the rate you should have paid.
2. Statutory Interest: 8% simple interest per year on that overpayment, calculated from the date you paid it until the date you get it back.
3. Tax Deduction: Lenders often deduct income tax from the statutory interest portion (not the principal refund).

Factors That Increase Your Refund

• Loan Size: A £30,000 car loan generates a much larger refund than a £5,000 one.
• Interest Rate Markup: The wider the gap between the base rate and your rate, the bigger the claim.
• Loan Duration: A 5-year loan accumulates more compound interest than a 2-year one.

Realistic Expectations

• Small Claim: £300 - £700 (Smaller car, shorter term, small markup)
• Average Claim: £700 - £1,600 (Typical family car, 3-4 year term)
• Large Claim: £3,000+ (High-value vehicle, high interest rate, long term)

Disclaimer: These figures are based on industry averages and should not be taken as a guarantee of your specific payout. The FCA estimates an average refund of around £700.