PCP (Personal Contract Purchase) car finance deals have become hugely popular in the UK, but many were mis-sold. If you were misled about the terms, commission fees, or affordability of your car finance agreement, you might be eligible to claim compensation. This guide will walk you through the key checks to determine if you qualify and how to start your claim.

Step 1: Understanding PCP Mis-Selling

PCP is a type of car finance where you pay monthly instalments with a final balloon payment to own the vehicle. However, many consumers were not given clear information about commission structures, interest rates, and affordability checks. If a salesperson failed to disclose that they earned commission from your deal, you may have been mis-sold.

One of the biggest issues was hidden commissions. The Financial Conduct Authority (FCA) found that many lenders allowed dealers to set their own interest rates, leading to inflated costs for consumers. If your dealer did not explain the commission structure or pushed you towards a deal without assessing affordability, you could have a valid claim.

Step 2: Signs You Were Mis-Sold PCP Finance

You may have been mis-sold a PCP deal if:

• The dealer did not inform you about earning commission on the finance agreement.
• You were not given a full breakdown of how the interest rate was set.
• The finance agreement was unaffordable based on your financial situation at the time.
• You were encouraged to take out a new PCP deal without being told about cheaper options.
• The contract was confusing or lacked key information about balloon payments or mileage limits.

If any of these apply to you, you should consider making a claim. A PCP claims checker can help assess your eligibility based on your finance agreement details.

Step 3: How to Check If You Are Eligible

To check if you can claim, start by reviewing your finance agreement. Look for details about commission disclosures, interest rates, and affordability assessments. If any of these were unclear or missing, you could have been mis-sold.

You will also need to check when you took out the agreement. The FCA has been investigating cases going back several years, but the sooner you act, the better. Claims are often processed faster when you have all the required documents, including your finance agreement and any communication with the lender.

Step 4: What You Could Be Owed

Compensation amounts vary depending on how much you overpaid due to hidden commissions or misleading terms. Some consumers have received thousands of pounds in refunds, covering excessive interest payments and unfair charges.

According to the FCA, UK consumers have been charged an estimated £300 million in unnecessary interest due to discretionary commission arrangements. This means lenders and dealers pocketed profits at the expense of car buyers. If your PCP deal was affected, you could be entitled to a refund.

Step 5: How to Make a PCP Claim

If you believe you were mis-sold, follow these steps to start your claim:

1. Gather your documents – Find your finance agreement, statements, and any emails with your lender or dealer.
2. Contact the lender – Write to your finance provider, explaining why you believe you were mis-sold.
3. Wait for a response – The lender has eight weeks to reply with a decision. If they reject your claim, you can escalate it.
4. Complain to the Financial Ombudsman – If your lender refuses to compensate you, the Financial Ombudsman Service (FOS) can review your case for free.

Thousands of motorists are now reclaiming money from mis-sold PCP deals, so acting quickly could increase your chances of success.

Final Thoughts:

If you took out a PCP finance deal and were not given clear information about commissions, interest rates, or affordability, you may have a strong case for compensation. Checking your agreement and contacting your lender is the first step towards reclaiming what you are owed.

Car finance mis-selling has cost UK drivers millions, and the FCA is actively addressing these issues. If you are unsure about your eligibility, start by reviewing your contract or using a claims service to check your case. The sooner you act, the better your chances of a successful claim.