In conventional motion compensation, prediction block is related only with one motion vector for P frame. Multihypothesis motion compensation (MHMC) is proposed to improve the prediction performance of conventional motion compensation. However, multiple motion vectors have to be searched and coded for MHMC. In this paper, we propose a new low-cost multi-hypothesis motion compensation (LMHMC) scheme. In LMHMC, a block can be predicted from multiple-hypothesis with only one motion vector to be searched and coded into bit-stream, other motion vectors are predicted from motion vectors of neighboring blocks, and so both the encoding complexity and bit-rate of MHMC can be saved by our proposed LMHMC. By adding LMHMC as an additional mode in MPEG internet video coding (IVC) platform, the B-D rate saving is up to 10%, and the average B-D rate saving is close to 5% in Low Delay configure. We also compare the performance between MHMC and LMHMC in IVC platform, the performance of MHMC is improved about 2% on average by LMHMC.