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.

PCP vs HP Claims: Understanding Your Car Finance Options

PCP Claim Finder Team8 April 20266 min read

PCP and HP: What Is the Difference?

If you have ever bought a car on finance, you have probably come across both PCP and HP. They are the two most popular forms of car finance in the UK, but they work quite differently. Understanding the distinction matters — not just for buying a car, but for knowing your rights if the finance was mis-sold.

Personal Contract Purchase (PCP)

PCP is the more popular option, particularly for new cars. Here is how it works:

You pay a deposit (typically 10-20% of the car's value)
You make fixed monthly payments over an agreed term (usually 24-48 months)
At the end, you have three choices: hand the car back, pay a large final "balloon" payment to own it, or use any equity towards a new deal
Monthly payments are lower because you are not paying off the full value of the car — just the depreciation

The balloon payment is based on the car's Guaranteed Minimum Future Value (GMFV), which is estimated at the start of the agreement.

Hire Purchase (HP)

HP is more straightforward:

You pay a deposit
You make fixed monthly payments over an agreed term
At the end of the term, you own the car outright
Monthly payments are higher than PCP because you are paying off the entire value
There is no balloon payment

With HP, ownership transfers to you automatically once all payments are made.

Side-by-Side Comparison

| Feature | PCP | HP | |---------|-----|-----| | Monthly payments | Lower | Higher | | Ownership at end | Only if you pay balloon | Automatic | | Balloon payment | Yes | No | | Mileage limits | Yes | No | | Flexibility at end | Return, buy, or exchange | You own it | | Typical term | 24-48 months | 24-60 months | | Common for | New cars | New and used cars | | Commission risk | High | High |

Can You Claim for Both PCP and HP?

Yes. Both PCP and HP agreements are eligible for mis-selling claims. The hidden commission issue affected both types of finance equally.

When a dealer arranged either a PCP or HP agreement, they typically received commission from the lender. Under Discretionary Commission Arrangements (DCAs), the dealer could inflate the interest rate on either type of agreement and pocket the difference.

The FCA's ban on DCAs and its broader review cover PCP, HP, and conditional sale agreements. The type of finance you had does not determine whether you can claim — what matters is how it was sold.

How Do Claims Differ Between PCP and HP?

While the eligibility criteria are the same, there are some practical differences in how claims play out:

Claim Amounts

HP agreements often involve higher monthly payments because the full vehicle cost is being financed. This means the absolute interest overpayment can sometimes be higher for HP, even at the same interest rate markup.

However, PCP agreements on more expensive vehicles (where only the depreciation is financed but the base amount is large) can also produce substantial claims.

The main factors affecting compensation remain the same for both:

The size of the commission markup on the interest rate
The total amount financed
The length of the agreement

For more detail on expected payouts, see our guide to PCP claim amounts.

Documentation

The paperwork for PCP and HP claims is very similar. In both cases, you will want (if available):

The finance agreement itself
Details of the vehicle
The name of the lender

Our article on required documents covers what you need for both types.

Process and Timeline

The claims process is identical for PCP and HP. Both follow the same steps:

Submit your details
Investigation into commission arrangements
Complaint submitted to the lender
Lender reviews and responds
Compensation paid (or escalation to the Financial Ombudsman)

The timeline for resolution is broadly the same regardless of the finance type.

What About Conditional Sale Agreements?

Conditional sale agreements work similarly to HP — you make regular payments and own the car once the final payment is made. The main legal difference is when ownership formally transfers.

For the purposes of claiming, conditional sale agreements are treated the same way as HP. If hidden commission was involved, you have the same right to complain and claim compensation.

What About Personal Loans Used to Buy Cars?

If you took out a personal loan from a bank or building society and used the money to buy a car, this is generally not covered by PCP/HP claims. The reason is simple: there was no dealer or broker acting as an intermediary, so there was no hidden commission.

However, if a dealer arranged a personal loan on your behalf (some did), this could still be subject to a claim. The critical question is always whether a middleman earned undisclosed commission.

What If You Have Had Both PCP and HP?

Many people have used different finance types over the years. You might have had an HP deal on one car and a PCP deal on the next. In that case, each agreement is assessed separately.

This often works in the claimant's favour. Multiple agreements mean multiple potential claims. We have seen clients successfully claim on a combination of PCP and HP deals stretching back several years.

Which Type Produces Better Claims?

There is no definitive answer because it depends entirely on the specific terms of your agreement. But here are some general observations:

HP on used cars sometimes carried higher interest rates (because used car finance often does), which can mean larger commission markups and bigger refunds
PCP on new cars may involve larger finance amounts, which can also lead to significant claims even at moderate commission rates
Long-term HP agreements (4-5 years) accumulate more overpaid interest than shorter PCP deals

The best approach is to check each agreement individually rather than assuming one type will be more valuable than another.

Common Questions

Can I claim if I voluntarily terminated my PCP? Yes. Voluntary termination does not affect your right to claim for mis-sold finance.

Can I claim on an HP agreement that I paid off early? Yes. Early settlement does not disqualify you.

I had a PCP, rolled the equity into a new PCP — can I claim on both? Yes. Each agreement is a separate claim. Rolling equity from one deal into the next does not merge them.

Does it matter if the car was new or used? No. Both new and used car finance agreements can be claimed against, regardless of whether they were PCP or HP.

Check Your Agreements

Whether you had PCP, HP, or both, the important thing is to check. Hidden commission was a systemic issue across the motor finance industry, and it affected both types of agreement equally.

Start your free claim check now — you can submit details for each agreement separately, and we will tell you which ones have a valid claim. Our service is no win, no fee, so there is no cost if your claim does not succeed. Get in touch if you need help working out what type of finance you had.