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PCP Claims and What You Should Know

Author: Samuel Beckingham
Updated: Mar 27, 2023
6 minutes read
  • Are PCP claims real and how do they work?
  • Mini mis-sold PCP claim calculator
  • The ins and outs of mis-sold PCP claims

Personal contract purchase (PCP) is perhaps the most popular way of buying a new car. A lot of the time, though, PCP deals were mis-sold, which means that you may have been pushed into a deal that wasn’t right for you. PCP claims are realistically about setting this right. It could have been mis-sold for many different reasons, such as the dealership not disclosing how much commission you may have been paying during your contract. Are PCP claims real? They absolutely are, and this article will explain everything you need to know about them before you make a claim of your own.

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What Are Mis-sold PCP Claims?

Similar to hire purchase (HP) agreements, PCP comes with several differences. You pay a deposit, make monthly payments throughout the time you have the vehicle, and then either pay a lump sum to keep the car or use its value to put towards the deposit of another PCP deal. Alternatively, you can give the car back and not pay anything to the car dealer. Are PCP claims really confusing? Unlike the ins and outs of a PCP deal, PCP claims are really straightforward.

PCP contracts have been under direct scrutiny from the Financial Conduct Authority (FCA) for some time now as it was revealed that a number of car dealerships had not been transparent enough with their customers. Typical mis-selling includes poor advice on financial options, not disclosing the commission structure and not being clear on how PCP finance actually works. Mis-sold PCP claims are really all about making sure you receive compensation for any inconvenience you may have experienced.

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How Do PCP Claims Work?

For any car that you had on PCP finance in the last ten years, you can make a claim. Mis-sold PCP claims work against the car that you owned through the deal. If you had several cars on PCP in the last decade, you can make a claim for every single one, which will entitle you to more compensation. Are PCP claims really worth it? With the average compensation around £3,000 per vehicle, they are worth your time.

Are you eligible to make a PCP claim?

Mini Mis-sold PCP Claim Calculator

To discover if you qualify to make a claim, you can use the questions below to help get a better idea about whether you can make a mis-sold PCP claim.

Are PCP claims really for me? They are, if:

  • Your PCP deal was within the last 10 years

  • You were charged more than 4.9% APR

  • The contract wasn’t explained clearly to you, including fees, total cost and interest rates

  • You didn’t receive as competitive offers as you could have been

  • Ownership of the vehicle during the length of the contract wasn’t explained

  • You were not aware of a mileage limit

  • The loan you were given was unaffordable, and the seller knew this

  • Alternative financial options were not offered to you

  • Add-on insurance was pushed on you, but you didn’t need it

  • You were informed that high costs would be incurred if you damaged the vehicle

PCP claims are real and available for hire purchase as well.

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Key Points About PCP

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Ownership

In order to understand more about the claims process, it’s important to be aware of several points specifically about PCP. When you take out a car with PCP, the car does not belong to you. It only becomes your property after you make the final balloon payment and pay off any remaining debts from the contract. PCP claims are real in that they compensate you for this confusion.

Credit

You need to pass a credit check before you are allowed to make use of a PCP deal. This is one of the most basic sets of criteria, and if the dealer you took out a PCP agreement with did not run a credit check, you were mis-sold. PCP claims are real value for money in that they can give you a few thousand pounds for something that was not right for you in the first place. Alongside the credit check, the monthly payments need to be realistic and suitable for you. If this wasn’t the case, then you were also mis-sold.

Mileage and Charges

When you take out a PCP deal, there are set limits to what you can do. One of the most overlooked (or unexplained) parts of the contract is the mileage limit. In order to guarantee a minimum future value of the vehicle, the dealer specifies that you can only drive so far every year. If you go over this, you will be charged, and your contract will tell you how much this is. This is because the dealer is expecting to receive the car back at the end of the contract. PCP claims are really about fully understanding the terms and conditions of the finance option and if it’s right for you.

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Like any extra mileage, excessive wear, tear and damage will also set you back. Before you get drawn in by the car of your dreams, it’s worth asking the dealer for examples of how they judge damage. Having written examples will save you a headache further down the line. PCP claims are really easy to understand compared to all the fine points with these contracts.

Further information about mis-sold PCP.

Are PCP Claims Really Hard to Make?

The claims themselves can be a lengthy process if you’re looking to do it without any help. Mis-sold PCP claims need to be put towards your finance provider or credit broker in the first instance as they need a chance to make it right. If you write to them about a claim, they have eight weeks to settle it. PCP claims are really all about waiting, as even if the provider doesn’t respond or you’re not happy with their response, you’ll have to present your case to the Financial Ombudsman and then wait up to three months for their verdict.

If you wish to submit a claim yourself, it will take lots of evidence, and you will need to present this to the relevant companies as and when needed. The alternative is to simply use a claims management company as they can do all the hard work for you. PCP claims are real easy to process for these companies. With a panel of legal experts on their side, they can check your paperwork and see if you have grounds to make a claim. A claims management company will even process the whole thing for you, making sure you receive as much as you’re entitled to. Are PCP claims real? They are, and there are many companies out there that can process your claim for you.

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