Personal Contract Purchase (PCP) claims have become a major topic in consumer finance. Thousands of UK car buyers may have been mis-sold PCP agreements due to hidden commissions, unclear terms, or unfair charges. If you took out a PCP car finance deal in the last ten years, you could be eligible for compensation.
Who Qualifies for a PCP Claim?
Many car buyers signed PCP agreements without full transparency on commission structures. If you meet any of the following conditions, you might have a valid claim:
- The dealership or lender did not disclose that a commission was being paid.
- You were not given a clear breakdown of interest rates and fees before signing the contract.
- The finance provider failed to explain how different deals affected the total repayment.
Financial watchdogs, including the Financial Conduct Authority (FCA), have investigated these practices. According to FCA reports, 80% of PCP finance deals included hidden commissions that increased customer costs.
How Much Could You Claim?
The exact amount varies based on your contract and financial loss. However, claimants typically receive between £1,000 and £10,000 depending on loan size, interest rate, and unfair charges. If a lender misled you, you could reclaim:
- Overpaid interest due to hidden commissions.
- Excess charges from misleading contract terms.
- Compensation for financial losses caused by mis-selling.
A 2023 FCA review found that one in three PCP agreements contained elements of potential mis-selling. If your deal was unfair, you could be owed significant compensation.
How to Apply for a PCP Claim
Applying for a PCP claim is straightforward, but you need the right evidence to back your case. Follow these steps:
- Gather Your Documents – Locate your original PCP finance agreement, payment statements, and any communication with the lender.
- Check for Mis-Selling – Review your contract to see if commissions were undisclosed or terms were misleading.
- Use a PCP Claims Checker Free Tool – Some online tools help assess whether you have a valid case before applying.
- Submit Your Complaint – Write to the lender or finance company explaining why you believe the agreement was mis-sold.
- Escalate If Rejected – If the lender refuses your claim, take it to the Financial Ombudsman Service (FOS) for independent review.
How Long Does the Process Take?
Claim timelines vary based on the lender’s response and investigation. Most claims take between 8 to 16 weeks if settled directly with the finance provider. However, if you escalate the case to the FOS, it could take up to six months for a final decision.
Should You Use a Claims Management Company?
You can apply for a PCP claim for free, but some people prefer using a claims management firm. These companies handle the process for you but often take 25% to 30% of any successful payout. If you’re comfortable dealing with paperwork, submitting the claim yourself ensures you keep 100% of your compensation.
Final Thoughts
If you believe your PCP finance agreement was mis-sold, now is the time to act. The Financial Conduct Authority is increasing pressure on lenders, and many claims are successfully winning compensation. Use the steps above, check if you qualify, and submit your claim as soon as possible.
