Think you were mis-sold on your PCP or HP finance agreement? A recent Supreme Court ruling and Financial Conduct Authority update mean motorists may be able to make a PCP claim for unfair sales commission.
*Based on successful claims for multiple agreements, in line with the Financial Conduct Authority's estimation of an average payout of £950 per agreement
If you qualify for a claim, we'll work with you on a no-win, no-fee basis. This service means you only pay for our services if your PCP claim is successful; you won't pay a penny if it isn't.
Our consultants and admin team are specialists in consumer claims, so we're well-placed to support you and help you get the PCP compensation you deserve.
Our knowledgeable case handlers can assist in ensuring your PCP claims are compiled most appropriately to ensure they are successful, and your compensation is maximised.
We will review your application and prepare your case for submission to the lender. We will update you throughout the process and let you know if anything else is needed to reclaim.
Not Sure?
You do not need to use a claims management company or law firm to make your complaint; you can do it yourself for free, directly with your lender. If your complaint is not successful, you can refer it to the Financial Ombudsman Service yourself for free.
Use our online check to see if you're eligible to make a claim.
Provide your details to us, and our experts will assess your claim.
We will submit the claim to your lender and ensure it's lodged correctly.
Wait for the outcome and the compensation you deserve.
Personal Contract Purchase (PCP) agreements are the most commonly sold financial products for purchasing a car. With an initial deposit payment, ongoing monthly payments and a final ‘balloon’ payment, they make acquiring a vehicle feasible for the vast majority of consumers. If any of this rings a bell, then you have more than likely signed a PCP agreement, and if you did so within the last 18 years, then you’re most likely eligible for PCP claims.
Use our simple online check to see if you’re eligible for a PCP finance claim:
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Hire Purchase (HP) agreements entail paying a fixed monthly amount to acquire a vehicle, and unlike PCP agreements, they don’t entail a balloon payment at the end of the finance term. HP agreements are most commonly sold to business customers, but it is still possible you have secured this type of loan personally. If this rings a bell, you may have signed an HP agreement, and if you did so within the last 18 years, you’re most likely eligible for car finance claims.
Use our simple online check to see if you’re eligible for a HP finance claim:
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Following the Supreme Court ruling, the Financial Conduct Authority (FCA) announced in August 2025 that it was moving forward with plans to consult on a redress scheme, marking a significant step towards compensation for millions of consumers. The regulator will publish the consultation by early October 2025, and is seeking to start compensating affected consumers in 2026. The redress scheme follows a review by the FCA, which found that firms did not comply with the law or disclosure rules due to unfair discretionary commission arrangements or excessive commission fees. The costs of the scheme could potentially range from £9 billion to £18 billion, with the FCA estimating that most consumers will receive under £950 in compensation per agreement. Compensation will vary based on each case, with the FCA looking to calculate it based on the degree of harm suffered by the consumer.
Check today to see if you are one of the consumers who could make a PCP reclaim:
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Here are some of the reasons to consider us for your PCP claim...
As a UK citizen, you have fundamental consumer rights. Financial products must be explained to you with transparency and integrity. Motor finance agreements have been sold with exorbitant sales commissions. We understand how to enforce your right to financial parity to reclaim these hidden fees via a successful PCP claim.
The team at PCP Claim UK and its legal partners live and breathe consumer finance claims, so when you work with us, you can rest assured that we’ll leverage our knowledge and experience in your best interests. You only need to provide information about your agreements; we can take it from there. We will submit a legal claim directly to your provider while you wait for the results.
Don't hesitate to check if you are eligible for a PCP claim. We provide a free online eligibility checker, allowing you to determine if your finance agreement was affected. Our free tool helps you understand your current position without any upfront costs or obligations. Gain peace of mind by discovering if we can assist you with our free and quick checker.
Financial mis-selling is immoral and damaging, as it causes consumers to receive a financial product or service that isn’t entirely in their best interests. Motorists may have been incorrectly advised, resulting in economic loss, when purchasing a car on finance. If you bought a motor vehicle, such as a car, van or motorbike, on PCP or HP finance before January 2021, you may have been mis-sold.
One of the most significant ways motorists have been mis-sold is by being charged a higher interest rate than they should have been. As with most loans, finance agreements for vehicle purchases typically come with interest fees that the borrower must pay throughout the contract period. However, consumers were offered deals with inflated interest rates because of discretionary commission arrangements.
The commission agreements meant consumers paid more interest, allowing the dealer or broker to receive a larger commission fee. Motorists may have thought this was a fixed rate, but there were cheaper deals available that the dealer should have told them about. According to the FCA, the average consumer may have paid £1,100 more interest than necessary.
Dealers not disclosing their commission fees or how their commission model works is another reason why motorists have been mis-sold. A claim might be possible if they didn’t tell you a commission agreement was in place, or if they did, but did not disclose how much money they would receive or how it works. The FCA estimates that 99% of deals included a commission model and that 40% are believed to be discretionary commission arrangements. This practice, banned in 2021, allowed brokers or dealers to offer customers an inflated interest rate, which they would take as part of their commission.
Buying a motor vehicle is a significant and costly decision, and failing to disclose a commission arrangement can lead to a conflict of interest and a lack of transparency, suggesting that the dealer is not acting in the consumer’s best interests.
Under the FCA’s Consumer Credit sourcebook (CONC) guidelines, the dealer or broker must check that you can afford the loan before you sign the car finance agreement. An affordability check examines your income and credit history to ensure you can afford the monthly payments. You may be able to claim if the company that arranged the finance failed to conduct an adequate affordability check before financing the vehicle.
You may have struggled to make monthly payments alongside your other financial commitments during the contract. You may have kept up with payments but got into debt by prioritising your car finance over other payments. If you had a PCP deal, the balloon payment at the end of your contract may have been more than expected because the dealer didn’t explain it adequately. These are just a few areas where the lack of affordability checks may impact you, but you were only mis-sold if you couldn’t afford the deal when taking it out.
Dealers and brokers must ensure that consumers are treated fairly and receive products and services that meet their needs. Part of this responsibility includes providing motorists with accurate and up-to-date information and advising them of any possible conflicts of interest. If they have a commercial relationship with a lender, such as a commission arrangement, they must disclose this to the consumer.
Many dealers and brokers failed to disclose their commercial relationships with lenders, which has been detrimental to consumers. Firms must disclose if they have a relationship with a lender. The dealer should inform the customer of the amount, if any, of commission they will receive from a lender.
Check out some of the most common questions posed to our team of experts, we’re here to help!
Yes, you can claim for mis-sold PCP without using a claims management company or law firm. You must first make a complaint to your lender. If the complaint isn’t successful, you can escalate it to the Financial Ombudsman Service. Using a claims management company or law firm can help alleviate the stress of the process. We are experienced in assisting clients to receive the compensation they deserve and making PCP claims easy.
As long as you bought all cars on PCP finance and you were mis-sold, then yes. You can claim for each finance agreement that was mis-sold to you.
The amount of compensation from a successful PCP claim can depend on various factors, including the type of commission that was involved. Agreements with discretionary commission arrangements are more likely to be unfair, and therefore, are more likely to warrant compensation. Agreements with commission fees that are deemed too excessive are also expected to be eligible for compensation. The higher the commission fee and therefore the more harm caused, the more compensation that the consumer will likely receive. When the FCA publishes its consultation on a redress scheme in October 2025, we will know more about how claims will be valued. The FCA estimates that most claimants will receive under £950 for each agreement, but some claims may be worth more than this. Each claim will be handled separately, so if you have multiple agreements, you will receive more compensation.
To claim for mis-sold PCP with us, we will need photographic ID and a signed letter of authority.
Car finance mis-selling is an industry-wide practice involving several dealers, introducers and banks. Therefore, if you bought a car on finance between April 2007 and January 2021, you may have been affected by the mis-sold PCP scandal.
Our No Win, No Fee agreement means you can make a PCP claim without financial risk. You will only pay our fees should your claim be successful. If your claim is unsuccessful, you won’t have to pay anything.
You might be eligible if you bought a car on PCP finance before January 2021, and the salesperson failed to disclose commission information, or you paid a high interest rate. Use our online checker to see if you can claim for mis-sold PCP.
Although awareness of mis-sold car finance has only emerged recently, consumers could have been affected as far back as April 2007. The Financial Ombudsman Service only began handling motor finance complaints on 6 April 2007, meaning claims are unlikely to be possible for agreements prior to this date.
Personal Contract Purchase (PCP) became one of the most popular ways to finance cars in the UK, particularly in the mid-2010s. With attractive monthly payment options, it was marketed as an affordable way for individuals to drive a new car. However, the complex terms and conditions were often not fully understood by consumers, leading to confusion about the true costs involved.
Concerns about the transparency of PCP agreements started to surface. The FCA began assessing whether these products were causing harm to consumers and if the market was functioning as effectively as it should. This prompted a growing number of consumers to question whether they were fully informed when signing these agreements.
The FCA launched an investigation into the car finance industry, focusing specifically on whether consumers were being mis-sold PCP contracts. This included scrutiny of commission structures and whether dealers provided adequate information about the risks. The investigation also aimed to assess whether the sales practices in the car finance sector were fair and transparent for consumers.
The FCA concluded that many PCP agreements were potentially mis-sold. It found evidence that some dealers were inflating interest rates to increase their own commissions, leaving consumers paying significantly more than necessary. This led to a broader call for reforms to improve transparency and protect consumers from unfair practices.
To address the issues highlighted, the FCA banned discretionary commission agreements (DCAs) that incentivised dealers to increase interest rates. In this model, the higher the interest rate offered to the customer, the more commission the dealer earns. This created a significant conflict of interest, encouraging dealers to push higher interest rates without necessarily disclosing their impact on costs.
The FCA launched an extensive investigation into commission practices following an increase in rejected consumer complaints. During this period, the usual 8-week deadline for providers to respond to these complaints was suspended. The investigation aimed to determine whether these commission practices were detrimental to consumers.
In February 2024, Lloyds Banking Group, the parent company of Black Horse Finance, became the first major bank to prepare compensation in the event of successful PCP claims. Lloyds reserved £450 million to cover potential compensation costs while awaiting the FCA's findings on mis-selling practices. This indicated that the bank believes a compensation scheme may be imposed.
The FCA pushed back the conclusion of its investigation and confirmed that lenders would not be required to respond to complaints until 4 December 2025. Sheldon Mills, from the FCA, stated that the likelihood of a redress scheme being implemented is now higher than when the review first began.
In what has been described as a landmark event, the Court of Appeal ruled in favour of three consumers against Close Brothers and FirstRand, potentially paving the way for billions of compensation. Following the test case, the judges declared it unlawful for lenders to have paid any commission (not just DCAs) to dealers without the borrower being fully aware of it. Not only did this decision increase the likelihood of successful PCP claims, but it also had the potential to shake up the entire consumer lending sector.
The credit ratings agency Moody's estimated that the scandal could cost the industry as much as £30 billion in compensation. Since Lloyds became the first bank to put aside £450m for potential compensation, more lenders followed suit. Santander set aside £295m while MotoNovo Finance prepared to potentially pay £209m to affected consumers. Close Brothers took several steps to raise £400m, including selling its wealth management unit.
The Court of Appeal ruling surprised the entire industry with the judgment that consumers who took out a car finance agreement involving any commission, not just DCAs, may have been mis-sold if they weren't told about the commission or provided their informed consent. Due to this development, the FCA announced an extension to the deadline for providers to respond to complaints about car finance agreements involving a commission, bringing it in line with the DCA extension.
Providers don't have to respond until 4 December 2025, regardless of the type of commission that the complaint refers to. The FCA's next steps and whether to expand its investigation to focus on all commission-based agreements largely depend on the Supreme Court's case.
UK Chancellor Rachel Reeves had previously stated her concerns about the effect of significant compensation payouts on the motor finance industry, claiming it could cause “considerable economic harm” and make it harder for consumers to buy an affordable vehicle. Reeves had requested permission to intervene in the upcoming appeal. However, the Supreme Court rejected the intervention of the Treasury. The FCA and National Franchised Dealers Associated were granted permission to intervene with written and oral submissions.
With the landmark Supreme Court appeal case just around the corner, more lenders announced they’d set aside money for potential compensation payouts. Barclays reserved £90m based on the “potential basis for and timing of redress.” Close Brothers put aside £165m to cover potential costs following a “thorough assessment” of the case. Lloyds Banking Group, which operates the Black Horse lending provider, announced an additional £700m, bringing its provisions to £1.25bn.
Another top lender, Santander, had previously set aside £295m. Bank of Ireland, which offers car finance via Northridge Finance, announced they've put aside €172m (£142m) to cover potential costs.
The FCA released a statement saying it will "likely consult on a redress scheme" should it find that customers have "lost out from widespread failings." The redress scheme would make firms responsible for determining if their customers have lost out and, if so, to offer appropriate compensation. The FCA noted that it wanted to provide as much certainty as possible, hence why it released a statement about the potential redress scheme.
Another interesting point from the announcement is that the regulator was no longer planning to announce the next steps in May following the conclusion of its investigation. Instead, it will announce if they are implementing a redress scheme and how, within 6 weeks of the Supreme Court's decision.
Between April 1-3, the UK Supreme Court heard the appeal in the landmark commission ruling. The case involved Close Brothers and FirstRand, with the Court of Appeal declaring in October 2024 that it was unlawful for them to have paid any commission to dealers without the borrower being fully aware and providing their proper consent. Both sides presented their arguments during the three-day hearing, and several parties offered written and oral submissions, including the FCA. The Treasury had previously been denied permission to do so.
Lord Reed, president of the Supreme Court, said that all sides had argued their case well and that the court would not rush a decision. He noted that the Court of Appeal took just under four months to make their judgment, and therefore, if they follow the same rate, they will "probably" announce their decision in July. The court must determine whether or not to overturn the initial ruling, which will significantly impact whether more motorists might be able to reclaim undisclosed commission.
Ford Credit Europe (FCE) became the latest lender to set aside cash to cover the potential costs of the scandal. The company’s banking division, FCE Bank, announced it had put aside £61 million as an ‘estimated economic outflow’. The bank also said there is “significant uncertainty as to the extent of customer loss and the terms of any potential redress scheme.” Ford is one of several lenders that have announced provisions to cover compensation costs, with analysts predicting the scandal could cost the industry as much as £30 billion.
According to a Bloomberg report, Banco Santander SA, the Spanish owner of Santander, is considering shaping up its UK operations. Unnamed sources in the report say the company is now looking to split off its consumer finance division, including motor finance, from the rest of Santander UK. The bank has been reviewing its future in the UK over the last few months due to the impact of the car finance scandal, having previously set aside £295m to cover costs. The report says the company is ‘increasingly frustrated with the lagging performance of its UK business’ and is considering steps to improve its outlook. Santander has declined to comment on the report.
The FCA provided an update on the potential motor finance compensation scheme it is considering. The regulator confirmed that it still intends to announce whether it plans to launch a redress scheme within six weeks of the court’s decision, but is acting proactively to ensure that steps are taken as quickly as possible to deliver greater certainty for consumers, firms, and investors. Therefore, it has been seeking views from various stakeholders, and if a redress scheme is proposed, a consultation will be published explaining why it’s the right step and how it could work.
The FCA stated that the redress scheme would utilise the following principles: comprehensiveness, fairness, certainty, simplicity and cost-effectiveness, timeliness, transparency, and market integrity. It also confirmed it will consider whether the scheme will be opt-in (customers need to tell their firm they want to be included) or opt-out (customers will automatically be included unless they choose not to).
Finally, the FCA warned that a decision on how it will calculate redress has not been made, and it may take a different route than decisions made by the Financial Ombudsman.
Barclays is mounting a legal challenge to a decision by the Financial Ombudsman Service (FOS) regarding undisclosed commission in a 2018 car finance agreement; however, the hearing has now been suspended until September. The case has been delayed until after the upcoming Supreme Court decision due to concerns that the court may make findings on the “wrong legal basis,” which could lead to further appeals.
The Supreme Court handed down its much-anticipated judgment in the motor finance case on August 1st, partially overturning the Court of Appeal’s earlier decision. While it rejected the argument that lenders had effectively bribed car dealers or that dealers owed a fiduciary duty to customers, the court did find that in one of the cases, the finance agreement was unfair under the Consumer Credit Act. This ruling hinged on the size and concealment of the commission paid to the dealer, which the court deemed excessive and detrimental to the consumer.
The FCA announced it will move forward with plans to consult on a redress scheme aimed at compensating consumers affected by unfair motor finance agreements. The regulator intends to publish the consultation by early October, outlining the framework for assessing and delivering compensation. Payouts are expected to begin in 2026, with the total cost of the scheme estimated to be between £9 billion and £18 billion, according to the FCA. Eligible consumers are likely to include those who entered into agreements involving discretionary commission arrangements or paid excessive commissions, with the regulator stating that individuals are likely to receive less than £950 per agreement.
You may be entitled to compensation if you were affected by a mis-sold PCP agreement. The process to check your eligibility for a PCP claim is quick and straightforward—taking only a few seconds.
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