HP Car Finance Claims: What You Need to Know

Can you claim on an HP agreement?

Yes — Hire Purchase deals are covered by the same redress as PCP, if they carried an undisclosed DCA, high-commission arrangement or contractual tie. Owning the car at the end doesn't change your right to complain.

What matters is whether your interest rate was raised to earn the broker more commission, and whether that was explained — not whether it was HP or PCP. The scheme window runs from 6 April 2007 to 1 November 2024, where commission was payable to a broker.

Why HP deals can be affected

Many HP deals between 2007 and 2024 were arranged by commission-paid dealers and brokers. That's the setup where a discretionary commission arrangement could push up your rate.

HP finances the whole price of the car (you pay off the full amount plus interest over the term, then own it), so your interest rate still drove the broker's commission. If it was flexed up without telling you, you may have overpaid.

HP was especially common for used cars and for buyers who wanted to own the vehicle outright at the end. Because HP has no balloon payment, the monthly tends to be higher than PCP — but a DCA could still quietly raise the rate on either product.

HP vs PCP under the scheme

Both products are covered by the same scheme rules. The table shows where they differ for a claim.

The eligibility test is identical. If your HP had a DCA, high-commission arrangement or undisclosed tie, you're in scope on the same basis as a PCP customer.

Were you affected? A checklist

Check the date, the route and the disclosure. The more boxes you tick, the more it's worth complaining.

A 0% HP deal or one arranged directly with a bank (no broker) is generally excluded, because there was no broker commission to distort your rate.

• Your HP agreement started between 6 April 2007 and 1 November 2024 (commission payable to a broker).
• It was arranged through a dealer or broker paid commission.
• Your interest rate could have been raised to earn more commission (a DCA), or a large commission applied.
• The commission was not clearly disclosed to you in a way the FCA accepts.

HP-specific questions

A few HP situations come up often. Here's how the scheme treats each.

• You own the car outright — owning it doesn't weaken your claim; the commission issue is separate from ownership.
• You settled the HP early — you can still claim; see sold the car.
• You used voluntary termination — having used a legal right doesn't stop a separate commission complaint.
• Your HP was for a used car — used-car HP is covered on the same basis as new.

How much and how to claim free

The scheme returns overpaid interest plus interest on top, so amounts vary by deal — and claiming is free. Complain to the lender, then the ombudsman if needed.

Estimate with the compensation estimator, then follow how to claim. Claiming is free and you can do it yourself: complain to your lender first, then escalate to the Financial Ombudsman Service. You do not need a claims-management company taking a cut.

How HP's structure affects the figure

Because HP finances the whole car price, the financed amount — and therefore the potential overpaid interest — is usually larger than on a PCP of the same car. That can mean a larger redress figure on a mis-sold HP.

On a PCP you only finance the depreciation, so the interest-bearing balance is smaller. On HP you finance the full price, so the interest-bearing balance is the whole car. A DCA that added 2 points to the APR therefore produces more extra interest on the HP than on the PCP, all else equal.

That said, HP terms are often shorter, which works the other way. The only way to know your figure is to work it out from your own deal — the compensation estimator does this for free.

Conditional sale and lease-to-own

Conditional sale and similar agreements are treated much like HP for these purposes, if they carried undisclosed commission. The scheme focuses on the commission, not the product name.

Conditional sale (CS) is a close cousin of HP: you pay instalments and take ownership at the end, with interest. If your CS agreement was arranged through a commission-paid broker between 2007 and 2024 and the commission was not properly disclosed, the same scheme logic applies.

If your paperwork says "conditional sale" rather than "hire purchase," don't assume you're excluded — the eligibility test is the same.

HP and used cars

HP was the classic way to finance a used car, so many affected HP agreements are on used vehicles. Used-car HP is covered on the same basis as new.

Dealers arranged large volumes of used-car HP through commission-paid brokers during the window, and these are a significant share of the roughly 12.1 million agreements the FCA estimates are in scope. The eligibility test does not depend on the car being new.

Any figure you see is an estimate, not a promise — nobody is guaranteed a payout, and the amount depends on your own agreement.

A worked HP example

Because HP finances the whole car, a DCA on HP can produce a larger overpaid-interest figure than the same rate bump on a PCP of the same vehicle. Here's the maths, for illustration only.

The reason HP tends to sit above PCP for the same rate bump is simple: the financed amount is bigger, so the interest difference is bigger. Shorter HP terms (36 months) pull the figure back down; longer terms (60 months) push it up. Work your own figure with the compensation estimator.