PCP (Personal Contract Purchase) car finance deals have helped millions get a car with manageable payments. But many agreements include hidden commissions or unfair terms that borrowers were never told about. If you’ve taken out a PCP deal in the last ten years, you may be owed compensation. Here’s what lenders don’t want you to know and how you can claim what’s rightfully yours.
The Problem with PCP Finance
PCP agreements often include an undisclosed commission paid to the dealer by the lender. This means the dealer has an incentive to sell you a loan with higher interest rates. The Financial Conduct Authority (FCA) found that over 95% of car finance agreements between 2010 and 2021 had discretionary commission models. This led to customers paying over £1,000 more on average over the loan term.
In 2021, the FCA banned this practice, but many who took out deals before this are still paying the price. If you weren’t told about the commission, your lender could owe you a refund.
How to Check If You Have a Claim
To see if your PCP finance deal was mis-sold, check your agreement for the following:
- Hidden commissions – Were you informed about any dealer incentives?
- Higher-than-average interest rates – Did the dealer set your rate rather than the lender?
- Lack of transparency – Were key financial details left out of the conversation?
If any of these apply, you could be entitled to claim back thousands. Many customers are using a pcp claims calculator to estimate how much they could recover.
How Much Could You Be Owed?
The amount you can claim depends on the interest you overpaid and any fees involved. Successful cases have resulted in refunds of £1,500 to £8,000, depending on the loan amount and term. The FCA estimates that billions in compensation could be owed to UK car buyers.
The Claims Process
Making a claim is straightforward if you follow these steps:
- Request your finance agreement – Contact your lender for a copy of the original agreement.
- Check for undisclosed commissions – Look for any dealer payments that weren’t mentioned.
- Submit a complaint to your lender – State why you believe the agreement was unfair.
- Take it to the Financial Ombudsman – If the lender refuses, escalate the case for review.
The Financial Ombudsman Service (FOS) has ruled in favour of thousands of claimants. If your case is strong, you stand a good chance of success.
What Lenders Don’t Want You to Know
Lenders have set aside billions for potential payouts, but they won’t advertise it. They might delay your claim, reject it outright, or offer a low settlement. Knowing your rights and pressing ahead with a formal complaint increases your chances of getting the full amount.
