A concise guide to PCP car finance claims and compensation in the UK (5‑minute read).
Personal Contract Purchase (PCP) made car ownership affordable but millions may have overpaid thanks to undisclosed “discretionary commissions”. If your agreement was mis‑sold, a PCP claim could win you a refund plus interest. This article explains what happened, how to check your eligibility, and the quickest way to start a no‑win‑no‑fee* claim.
The PCP Car Finance Scandal Explained
Personal Contract Purchase deals boomed over the last decade. In January 2024 the Financial Conduct Authority (FCA) revealed that many dealers were paid extra commission for pushing higher interest rates. In simple terms, borrowers often paid more than necessary for the same car.
As we covered in our Supreme Court PCP case explainer, these issues are started to be properly address at the highest level.
“If motor‑finance customers have lost out from widespread failings, we are likely to consult on an industry‑wide redress scheme.” FCA statement, March 2025 [1]
How Big Is the Problem?
- £44 billion – potential total compensation bill if everyone affected claims[2].
- 23 million drivers – think they may be eligible, YouGov survey July 2025[3].
- December 2025 – current deadline for lenders to answer complaints while the FCA gathers evidence[4].
This could become the UK’s largest consumer‑finance payout since PPI.
Was Your PCP Car Finance Deal Mis‑Sold?
You may have grounds for a PCP claim if:
- Your interest rate seemed high compared with other offers promoted elsewhere.
- The salesperson didn’t mention commission or claimed to be “just a lender”.
- You were told “this is the standard rate” or “the rate is fixed by the lender”, or even told that this was the best rate available to you – if they didn’t check a wide panel, then they simply didn’t know if the statement was true.
- Attention was drawn to the small final balloon payment while the total cost was glossed over.
You can claim even if you paid off the agreement early, provided the finance started after 6 April 2007.
Think you’ve been mis-sold PCP, clink the link to start you claim today!
Legal Milestones You Should Know
| Date | Event | Why It Matters |
| Oct 2024 | Court of Appeal: lenders must prove they disclosed commission | Strengthens borrower arguments |
| Mar 2025 | FCA: industry‑wide redress scheme now “more likely than not” | Signals blanket compensation[1] |
| Jul 2025 | Supreme Court verdict expected on test case | Could set binding precedent |
How Much Could You Get Back?
Compensation should restore you to the position you’d be in without hidden commission:
- Interest rebate on every instalment already paid.
- Reduced future payments or a lump sum if you have settled.
- 8% statutory interest added by the Financial Ombudsman in many cases.
When a customer claim is successful, the banks are told to repay the amount mis-sold plus an 8% interest on top.
As of January 2026, this interest is scheduled to drop significantly (to 1% of the base rate at the time). This is a great reason to ensure that your claim is in as soon as possible.
The FCA estimates the average refund at £1,500, but high‑value vehicles may exceed £10,000[5].
Don’t miss out with the change in interest rate payments, get your claim started now.
PCP Car Finance Claim: Your Three Main Options
Disclaimer: You can complain to your lender yourself at no charge. Many consumers choose a regulated claims firm that manages the process on a no‑win‑no‑fee basis.
| Route | Cost | Timeframe | Best For |
| DIY complaint to lender (free template) | Free | 8-16 weeks | Straightforward cases, confident letter‑writers |
| Financial Ombudsman Service | Free | 6-18 months | Rejected or unanswered complaints |
| Specialist claims partner (no‑win‑no‑fee) | 20-30% of redress | 3-12 months | Busy drivers, complex/high‑value cases |
A success fee is only payable if your claim succeeds, you owe nothing if you’re not awarded compensation.
Get matched with a regulated claims partner now to reclaim what you could be owed.
Your PCP Claim Action Plan
Key Deadlines & Next Steps
- Submit your complaint as soon as possible
Stay ahead of the FCA’s response window keeps your claim moving.
- Keep all documents in one place
Have your finance agreement, emails and dealership quotes ready to send.
- Monitor the Supreme Court ruling (expected late 2025)
A favourable decision could fast‑track automatic payouts.
Ready to Start?
Complete our secure form in under two minutes to see if you qualify. A trusted, FCA-authorised partner will call to discuss your options, no obligation, no upfront fees.
Frequently Asked Questions
Yes. The FCA review covers discretionary commission on both PCP and Hire Purchase deals issued through motor dealers since 2007.
You can still claim. Compensation is based on the interest you overpaid plus statutory interest.
No. Complaints and redress do not appear on your credit report, only missed payments do.
The regulator aims to confirm a redress scheme by March 2026. Individual claims continue in the meantime.
You can submit a claim yourself for free to your lender or the Financial Ombudsman Service, but many customers prefer the convenience of a regulated claims-management firm. Charges apply only on successful cases.
Sources
- Financial Conduct Authority. Motor finance review statements. March & June 2025. ( 11 Mar 2025 statement ; 5 Jun 2025 considerations ) ↩︎
- Financial Times. The banks exposed to a UK probe into motor finance. 16 July 2025. ( Article ) ↩︎
- The Guardian / YouGov. More than 23 m Britons think they may be due compensation for mis‑sold car loans. 7 July 2025. ( Guardian article ) ↩︎
- Financial Conduct Authority. Firms given until December 2025 to respond to motor finance commission complaints. June 2025. ( Extension notice ) ↩︎
- Reclaim247. Mis‑Sold PCP Car Finance Refunds – Average Payouts & Success. July 2025. ( Guide & case data ) ↩︎
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research and consult with a regulated financial advisor before making important financial decisions.
Stephen Dale heads the Editorial Team at The Finance Review.
We turn complex UK tax, pension and property rules into plain English so you can make informed choices.
Our articles are educational only and should not be taken as personal advice.
If you need tailored guidance, we can introduce you at your request to FCA authorised advisers, solicitors or chartered accountants who specialise in your situation.
Important: Stephen is a professional content strategist, not a regulated financial adviser or solicitor.
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