What is a PCP car finance claim?

A PCP car finance claim is a compensation claim against finance providers who mis-sold car finance agreements. Many dealerships received hidden commissions from lenders for arranging finance, which often resulted in customers paying higher interest rates without their knowledge. If you were affected, you may be entitled to a refund of the excess interest paid.

How much compensation can I expect?

The average claim is around £700 per finance agreement, though this can vary significantly depending on the size of your agreement and the level of hidden commission. Some claims have resulted in payouts of several thousand pounds. The FCA expects over £8 billion to be paid out across the industry.

How long does the claims process take?

Most claims are resolved within 3 to 6 months, depending on the lender's response time. Some straightforward cases may be resolved sooner. We'll keep you updated on progress throughout the process.

What does No Win, No Fee mean?

It means you won't pay anything if your claim is unsuccessful. Our fees range from 15% to 30% (plus VAT) of your compensation, depending on the amount recovered. There are no upfront costs, administration charges, or hidden fees.

Am I eligible to make a claim?

You may be eligible if you took out PCP or HP car finance between April 2007 and November 2024 and were not made aware of commission arrangements between the dealer and the finance provider. Even if you've already paid off your finance, you can still claim.

What information do I need to make a claim?

You just need your basic personal details — name, address, date of birth, and contact information. You don't need your original finance documents. Our system can search for your agreements using your details through credit reference agencies.

Can I claim if I have already paid off my finance?

Yes, absolutely. Whether your finance is still active or was paid off years ago, you can still make a claim. Many successful claims relate to finance agreements that ended several years ago.

What happens after I submit my claim?

After you submit, our team reviews your details and searches for eligible finance agreements. If agreements are found, we submit a formal complaint to the lender on your behalf. The lender then investigates and responds, typically within 8 weeks. If the claim is upheld, you receive your compensation minus our fee.

Hidden Commission in Car Finance: How Dealers Profit at Your Expense

PCP Claim Finder Team8 April 20267 min read

What Is Hidden Commission in Car Finance?

When you buy a car on finance through a dealership, the dealer does not just sell you a vehicle. They also act as a credit broker, arranging the finance deal between you and the lender. For this service, the lender pays the dealer a commission.

That commission, in itself, is not necessarily a problem. The issue is when it was never disclosed to you — and when the structure of that commission gave the dealer a direct incentive to put you on a more expensive deal.

This is what the industry calls a Discretionary Commission Arrangement (DCA). Under a DCA, the dealer could increase the interest rate on your finance agreement above the lender's base rate, and the higher they pushed it, the more commission they earned.

You were paying for it. You were never told about it.

How Widespread Was This Practice?

Extremely widespread. The FCA estimated that DCAs affected the vast majority of motor finance agreements arranged through dealerships between around 2007 and January 2021, when the practice was finally banned.

That covers millions of PCP, HP, and conditional sale agreements across the UK. If you bought a car on finance through a dealer during that period, there is a very high probability that hidden commission was baked into your deal.

How Much Did Hidden Commission Cost You?

The FCA's own analysis found that consumers were paying, on average, £1,100 more in interest over the life of their agreement because of DCAs. Some drivers paid significantly more, depending on:

The size of the finance agreement — Larger loans meant larger absolute commissions
The interest rate markup — Some dealers added several percentage points above the lender's base rate
The length of the agreement — Longer terms meant more months of inflated interest payments
The lender's commission structure — Different lenders offered different incentives

To put this into real terms: if a lender offered a base rate of 4% but the dealer marked it up to 9%, you were paying more than double the interest. The difference went straight into the dealer's pocket as commission.

A Worked Example

Consider a typical PCP agreement:

| Detail | Without Commission Markup | With Commission Markup | |--------|--------------------------|----------------------| | Amount financed | £15,000 | £15,000 | | Interest rate | 4.0% | 8.5% | | Term | 48 months | 48 months | | Monthly payment | £339 | £371 | | Total interest paid | £1,272 | £2,808 | | Extra cost to you | — | £1,536 |

In this example, the dealer's commission markup cost the customer over £1,500 in extra interest. The dealer pocketed the difference. The customer was never told.

What the FCA Found

The FCA launched its motor finance review after growing concern about commission practices in the industry. Their key findings included:

Widespread use of DCAs — The majority of dealers used these arrangements
Significant consumer harm — Millions of customers paid more than they should have
Lack of transparency — Consumers were routinely not told about commission arrangements
Conflicts of interest — Dealers had a financial motivation to act against the customer's best interest

Following these findings, the FCA banned DCAs from 28 January 2021. Lenders can still pay commission to dealers, but the amount can no longer be linked to the interest rate charged to the customer.

For the full picture on the FCA's actions, read our guide to the FCA car finance review.

How to Check If You Were Affected

There are several ways to find out whether your finance agreement included hidden commission:

Check Your Finance Agreement

Look at your original paperwork. Search for any mention of commission, broker fees, or intermediary payments. Many agreements did mention commission — but buried in fine print, vaguely worded, and without disclosing the actual amount.

Ask the Lender Directly

Under the Consumer Credit Act, you have the right to request information about your agreement, including commission details. Write to the lender and ask them to confirm whether commission was paid to the dealer and, if so, how much.

Check Your Interest Rate

Compare the interest rate on your agreement with the typical market rate at the time. If your rate seems significantly higher than what was available, commission markup may be the reason.

Use Our Free Claim Check

The simplest option is to submit your details through our claim form. We will investigate your agreement and tell you whether hidden commission was involved — at no cost to you.

What Should You Do If You Were Affected?

If hidden commission was part of your deal, you have the right to claim compensation. The process involves:

Gathering your information — Your vehicle details, the finance company, and any paperwork you still have. See our guide on required documents for specifics.
Submitting a complaint — Either directly to the lender or through a claims management company like ours.
Lender investigation — The lender reviews your case and determines whether commission was improperly disclosed.
Compensation — If your complaint is upheld, you receive a refund of the excess interest plus any commission that should have been disclosed.

If the lender rejects your complaint, you can escalate it to the Financial Ombudsman Service (FOS) for an independent review.

Common Questions About Hidden Commission

Does it matter if I have already paid off the finance? No. You can still claim even if the agreement ended years ago, provided it falls within the time limits.

What if I used PCP to get several cars? You can claim for each individual agreement where commission was not properly disclosed.

Will this affect my credit score? No. Making a claim about mis-sold finance has no impact on your credit rating.

What if the dealer has closed down? Your claim is against the lender, not the dealer. It does not matter if the dealership no longer exists.

Why Act Now?

The window for PCP claims will not stay open forever. Time limits apply, and as the FCA finalises its review, the rules around claiming could change. The sooner you start, the sooner you could have money back in your account.

Millions of UK drivers overpaid for their car finance because of hidden commission. If you were one of them, you deserve to know — and you deserve your money back.

Check your eligibility for a free PCP claim now. It takes just a couple of minutes, there is no obligation, and our service is no win, no fee. You can also contact our team directly if you would prefer to speak to someone.