Personal Contract Purchase (PCP) has been a popular way to finance cars, but many drivers are now questioning whether they were mis-sold their agreements. With millions of pounds potentially owed to customers, it’s essential to understand your rights and whether you can claim compensation. Here’s everything you need to know about PCP car finance claims, how they work, and how to check if you’re eligible.
What Is PCP Car Finance?
PCP is a type of car finance that allows you to spread the cost of a vehicle over a fixed term, usually with a balloon payment at the end. The structure includes an initial deposit, monthly payments, and an optional final payment if you want to keep the car. Many consumers were not fully informed about the total costs, interest rates, or commission structures, leading to potential claims for mis-selling.
Why Are PCP Claims Happening?
The Financial Conduct Authority (FCA) has been investigating whether lenders and dealers failed to disclose key details to customers. Some of the most common issues include undisclosed commissions, inflated interest rates, and misleading affordability checks. If you were not given clear and fair information when taking out your PCP agreement, you might be entitled to compensation.
How Do I Know If I Was Mis-Sold PCP Finance?
You might have been mis-sold your PCP agreement if:
- The dealer or lender did not explain the commission they received.
- You were charged a higher interest rate due to hidden commission fees.
- The affordability assessment was not properly carried out.
- You were misled about balloon payments and ownership options.
- Important financial risks were not clearly explained.
If any of these apply to your agreement, you may have grounds for a claim.
How Much Compensation Could You Get?
The compensation amount depends on how much you overpaid due to undisclosed commissions or inflated interest rates. Some drivers have received refunds of several thousand pounds. The FCA estimates that millions of customers may be affected, and claims could result in payouts worth billions. If you believe you were mis-sold, acting now could improve your chances of getting your money back.
How to Start a PCP Claim
If you suspect you were mis-sold PCP finance, follow these steps:
- Check your agreement – Look for details about commissions and interest rates.
- Contact your lender – Ask if they received a commission and whether it affected your loan.
- Use a PCP claims checker online – This tool helps determine if you have a valid case.
- Make a formal complaint – If your lender refuses to refund you, escalate the case to the Financial Ombudsman Service (FOS).
- Seek legal advice – If your claim is complex, a solicitor specialising in financial mis-selling can assist.
Deadlines for PCP Claims
There is no universal deadline, but claims must usually be made within six years of taking out the agreement or three years from when you first realised you were mis-sold. If the FCA introduces a redress scheme, similar to PPI claims, there could be a final deadline for submissions.
Final Thoughts:
If you suspect you were mis-sold PCP finance, taking action now could help you recover lost money. With increasing scrutiny from regulators and growing awareness among consumers, lenders may be forced to issue widespread refunds. Checking your eligibility, gathering evidence, and submitting a claim could put you in line for compensation. Don’t wait too long—start your claim today and see if you’re owed money.
