PCP Car Finance Claims: Are You Owed Money?

Can you claim on a PCP agreement?

Yes, PCP agreements are covered by the same redress as other car finance if they carried an undisclosed DCA, high-commission arrangement or contractual tie. Both PCP and HP deals fall within the FCA scheme.

The finance type doesn't decide it; the commission and disclosure do. What matters is whether the broker raised your APR to earn more commission, and whether that was explained to you. The scheme window runs from 6 April 2007 to 1 November 2024, where commission was payable to a broker.

A worked PCP redress example

Because a PCP's balloon keeps more of the loan outstanding for longer, the rate gap on a DCA can translate into a meaningful figure, but about one in three qualifying cases is still capped. The example below shows how the figure is built.

The reason PCP figures can look larger than equivalent HP is that the balloon keeps more of the amount borrowed outstanding until the end, so interest runs on a larger balance. But the method is identical: identify the DCA, reprice at the rate you would likely have been offered, and reconcile the difference. To swap the illustrative numbers below for your own, use the compensation estimator linked at the top of this page and again in the claim section below.

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 your lender first, then to the Financial Ombudsman Service if needed.

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. CMCs can take up to about 36% of any payout, and you keep that money if you claim yourself.

1. Estimate your PCP claim with the compensation estimator, using your own APR, amount and term.
2. Follow how to claim to send your complaint to the lender first.
3. Take it to the Financial Ombudsman Service if the lender's answer doesn't settle it.

Why PCP deals are often affected

PCP was hugely popular between 2007 and 2024, and the vast majority were arranged by commission-paid dealers and brokers. That's exactly the setup where a discretionary commission arrangement could apply.

A PCP keeps the monthly payment low because the monthly payments mainly cover the car's expected drop in value, with a large optional final payment (the balloon, set at the GMFV) due at the end. Interest is still charged on the whole amount borrowed, balloon included, and that interest rate drove the broker's commission. So if a DCA let the broker raise that rate, you paid more interest across the term, even though the monthly payment looked low.

Because the balloon stays outstanding until the end, interest runs on a larger balance for longer than on an equivalent HP deal, so the overpaid interest on a mis-sold PCP can be substantial. The scheme average is about £829 per agreement, with wide variation.

Were you affected? A checklist

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

If you took the PCP via a broker or dealer and can't remember commission being explained, it's worth checking. A 0% PCP or one with no broker commission is generally excluded.

• Your PCP started between 6 April 2007 and 1 November 2024 (commission payable to a broker).
• It was arranged through a dealer or broker paid commission, as most dealership PCPs were.
• 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.

PCP-specific questions

A few PCP situations come up often. The scheme treats each one as set out below.

• You handed the car back at the end: you can still claim, because the commission issue exists whether you kept, returned or settled the car.
• You settled the PCP early: you can still claim. See sold the car.
• You're still mid-term on the PCP: you can complain now, and redress may come as a credit to your live agreement.
• Your PCP had a GMFV/balloon: the balloon doesn't change eligibility. What matters is the commission on the financed amount.

How to check your own PCP for a DCA

You usually can't see a DCA on the face of a PCP agreement, so the check is to confirm the date, the broker route and then ask the lender directly. Three steps cover it.

The lender has to respond to your complaint and say if you are owed compensation, though the timing is uncertain while parts of the scheme are suspended. If it confirms a DCA, high commission or tie, your PCP is likely in scope; if no commission was paid (a true 0% PCP), it's outside the scheme.

1. Confirm your PCP started between 6 April 2007 and 1 November 2024 and was arranged via a dealer or broker (not a direct bank loan).
2. Find your agreement's APR, lender name and start date. See how to find your lender if you're unsure who financed it.
3. Ask the lender in writing whether a discretionary commission, high-commission arrangement or contractual tie applied, and how much commission was paid. Our letter template does this for you.

PCP vs HP vs PCH at a glance

The product you had changes whether you're in scope at all, and how any redress is sized. PCP and HP are both motor finance; PCH leasing is not.

If you're unsure which you had, look at your agreement. A PCP shows an APR, a lender and a balloon (sometimes called GMFV). HP shows an APR and a lender with no balloon. A lease shows monthly rentals and no APR. The estimator on our PCP and HP pages can help you tell them apart.