A compass compensation system is provided for automatically and continuously calibrating an electronic compass for a vehicle, without requiring an initial manual calibration or preset of the vehicle magnetic signature. The system initially adjusts a two axis sensor of the compass in response to a sampling of at least one initial data point. The system further calibrates the compass by sampling data points that are substantially opposite to one another on a plot of a magnetic field and averaging an ordinate of the data points to determine a respective zero value for the Earth magnetic field. The system also identifies a change in magnetic signature and adjusts the sensor assembly.