What Does PCP Actually Mean?
PCP stands for Personal Contract Purchase. It is one of the most popular ways to finance a car in the UK, accounting for roughly 80% of all new car finance agreements over the past decade.
With a PCP deal, you pay an initial deposit, followed by fixed monthly payments over an agreed term (usually 2-4 years). At the end of the agreement, you have three choices: hand the car back, pay a final "balloon payment" to own it outright, or use any equity as a deposit on a new deal.
On the surface, PCP sounds straightforward. The problem is that many of these agreements were sold with hidden commissions and without proper disclosure — and that is where PCP claims come in.
So What Is a PCP Claim?
A PCP claim is a request for compensation when your PCP finance agreement was mis-sold. In most cases, this means the dealer or broker who arranged your finance received a commission from the lender, and you were never told about it.
This matters because that commission often inflated the interest rate you paid. The dealer had a financial incentive to put you on a more expensive deal — and they did not tell you about it.
If this happened to you, you may be entitled to claim back the difference between what you paid and what you should have paid, plus the hidden commission itself.
How Does Car Finance Mis-Selling Happen?
Mis-selling takes several forms, but the most common issues with PCP agreements include:
- Hidden commission arrangements — The dealer received a payment from the lender for arranging your finance, which was not disclosed to you. This is sometimes called a Discretionary Commission Arrangement (DCA).
- Inflated interest rates — Because the dealer earned more commission on higher interest rates, they had every reason to push you onto a more expensive deal.
- Lack of affordability checks — The lender or dealer failed to properly assess whether you could afford the repayments.
- Pressure selling — You were pushed towards PCP finance without being told about other options, such as a bank loan or Hire Purchase.
- Inadequate explanation of terms — Key details like the balloon payment, mileage limits, or total cost of the agreement were glossed over or not explained at all.
You can read more about the warning signs in our guide on signs your car finance was mis-sold.
Who Can Make a PCP Claim?
You may be eligible to claim if:
- You took out a PCP agreement in the UK
- Your agreement was arranged through a car dealer or broker (not directly with a bank)
- You were not clearly told about any commission the dealer received
- Your agreement was taken out within the last six years (though some older claims may still be valid)
It does not matter whether your agreement is still active or has already ended. It does not matter whether you kept the car, handed it back, or part-exchanged it. What matters is how the finance was sold to you at the time.
If you are unsure whether you qualify, our eligibility checker can help, or you can check your claim directly.
What Did the FCA Find?
The Financial Conduct Authority (FCA) launched a review into motor finance commission arrangements and found widespread problems. Their investigation revealed that Discretionary Commission Arrangements led to consumers paying significantly more interest than they needed to.
As a result, the FCA banned DCAs from January 2021. But if you had a PCP agreement before that date, you may have been affected.
The FCA's findings confirmed what many suspected: dealers were routinely inflating interest rates to boost their own earnings, and consumers were left paying the price. For a full breakdown of the FCA review, see our detailed article on the FCA car finance investigation.
How Much Could You Get Back?
The amount varies depending on several factors: how much commission was hidden, the interest rate you were charged, the length of your agreement, and the total amount financed.
That said, typical payouts range from a few hundred pounds to several thousand. Some claimants have received over £5,000. You can learn more about expected amounts in our guide on how much you can claim for mis-sold car finance.
Is There a Time Limit?
Yes. Generally, you have six years from the date you entered the agreement — or three years from when you became aware (or should have become aware) of the issue. Given the level of media coverage around PCP claims, it is worth acting sooner rather than later.
The FCA has set specific timelines for lenders to respond to complaints. Delays work against you, not for you.
How Does the Claims Process Work?
The process is simpler than most people expect:
- Submit your details — Provide basic information about your finance agreement
- We investigate — Our team reviews your agreement and identifies any mis-selling
- Claim submitted — We put together your case and submit it to the lender
- Lender responds — The lender investigates and makes a decision
- Compensation paid — If successful, your compensation is paid out
The whole process typically takes between 8 weeks and several months, depending on the lender. We handle the paperwork and communication so you do not have to chase anyone.
For a full timeline breakdown, see our guide on how long a PCP claim takes.
Do I Need Documents?
Having your original finance agreement helps speed things up, but it is not essential. If you have lost your paperwork, we can still investigate your claim using other details. Our article on what documents you need covers this in full.
What Does It Cost?
We operate on a no win, no fee basis. If your claim is unsuccessful, you pay nothing. There is no upfront cost and no financial risk to you.
What Should You Do Next?
If you took out PCP car finance through a dealer at any point in the last six years, there is a strong chance you were affected by hidden commission. Millions of UK drivers were.
The claims process is straightforward, costs nothing upfront, and could put hundreds or thousands of pounds back in your pocket.
Start your free PCP claim check now — it takes less than two minutes, and you will find out quickly whether you have a valid claim. You can also learn more about how our service works or get in touch with our team if you have questions.