Personal Contract Purchase (PCP) car finance deals have been widely sold across the UK. Many drivers may have been mis-sold their agreements without realising it. If you were not given full disclosure of the terms, commission payments, or affordability checks, you could be entitled to a refund.
What is PCP Finance?
PCP is a popular way to finance a car, offering lower monthly payments than traditional hire purchase. At the end of the term, you can return the car, trade it in, or pay a balloon payment to own it. However, the structure of PCP agreements often hides additional costs and high-interest rates that consumers may not fully understand.
How Were PCP Deals Mis-Sold?
Many customers were not properly informed about key aspects of their agreements. Some lenders and dealerships failed to disclose high commission rates that inflated interest charges. Others neglected to carry out affordability checks, leading to financial hardship. If you were not made aware of these factors, your agreement may have been mis-sold.
Common Signs of PCP Mis-Selling
- Undisclosed Commission – Lenders paid dealers commission based on higher interest rates without informing customers.
- Lack of Affordability Checks – Many people were given PCP deals without proper checks on whether they could afford repayments.
- Unclear End-of-Term Costs – Customers were not always told about balloon payments or excess mileage charges before signing the contract.
Could You Be Owed a Refund?
If you suspect mis-selling, you may be able to reclaim unfair charges or seek compensation. The Financial Conduct Authority (FCA) is investigating the issue, and thousands of claims have already been submitted. The average refund for successful cases varies but can range from a few hundred to several thousand pounds, depending on the level of overcharging.
How to Check If You Have a Claim
The best way to find out if you are eligible is by using a PCP claims checker. This tool helps determine if your agreement was mis-sold based on the details of your contract. You will need to provide basic information about your finance deal, including the lender’s name, agreement terms, and any concerns about affordability or commission payments.
How to Make a PCP Mis-Selling Claim
- Gather Evidence – Find your finance agreement, emails, and any documents that show what you were told at the time of purchase.
- Contact Your Lender – Write to your lender and ask for a breakdown of the agreement, including commission details.
- Complain to the Financial Ombudsman – If your lender rejects your claim, you can escalate it to the Financial Ombudsman Service (FOS) for a review.
What Happens After You Submit a Claim?
Once your claim is submitted, your lender has eight weeks to respond. If they accept the claim, you could receive compensation, which may include a refund of excess interest payments or a reduction in your remaining balance. If they reject it, you can take your case to the FOS for a final decision.
Should You Use a Claims Management Company?
Many firms offer to handle PCP mis-selling claims on your behalf. However, they take a percentage of any compensation you receive. You can make a claim yourself for free, which ensures you keep the full amount of any refund awarded.
Conclusion:
If you took out a PCP finance deal and believe it was mis-sold, now is the time to act. With the FCA investigating industry-wide mis-selling, thousands of drivers have already recovered money. Checking your eligibility is simple, and making a claim could put cash back in your pocket. Don’t delay—review your agreement and take action if you suspect wrongdoing.
Sources:
- Financial Conduct Authority (FCA) – PCP finance review
- Financial Ombudsman Service (FOS) – Complaints on car finance agreements
- UK consumer rights reports on PCP finance mis-selling