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Are you eligible to make a PCP claim?

Author: Samuel Beckingham
Updated: Jul 27, 2022
4 minutes read

It’s thought that the average amount of PCP compensation that someone could be able to claim back can range from £3,000 to £15,000 depending on how many vehicles they had cover for. If you are interested in making PCP claims, it’s a very wise move to collaborate with a legal specialist who can help you build the most watertight possible to help you claim back what you have lost.

Cars parked in a row

What steps can I take to make PCP claims?

One of the steps that you can take if you want to make PCP claims or car finance claims is to talk to your lender and ask them to refund the amount that you paid under your PCP agreement. Should they refuse to co-operate with you, you can then approach the Financial Ombudsman Service or FOS. This free service works with customers who need to resolve disputes with finance companies. If the ombudsman finds that you should be entitled to a refund, they can demand that the company provides you with one.

Another step that you can take is to get help from a solicitor. In many cases, cases are settled before they reach court. Some legal companies work on a no-win, no-fee basis, which means you will only need to pay them if your PCP claims, PCP car finance claims or car finance claims are successful.

Will I be eligible to make a PCP car finance claim?

It’s said that more than nine-out-of-ten customers who bought their vehicle via a PCP are eligible to make PCP claims or car finance claims. This is because financiers didn’t normally inform their customers about the commissions given to dealerships and salespeople. This broke the rules of the Consumer Credit Act of 1974, which states that finance companies are obliged to clearly and fully explain the terms and conditions, fees, and payments attached to the agreement you entered into. If a company cannot prove that they did this, you may well be able to get compensation.

The consequences of being mis-sold finance products

There can be big consequences for people who are mis-sold financial products and don’t have important details explained to them. Many people making PCP claims or car finance claims have found themselves in financial difficulty after being caught out by something they weren’t aware of when they signed up for a finance product. You may find out that you owe more than you thought, and you could be met with various hidden costs.

What exactly is PCP finance?

PCP finance is ‘personal contract purchase’ finance. This is the most popular type of car financing and has become particularly popular because it’s one of the most affordable ways to purchase a car. As part of these agreements, car buyers normally put down a deposit worth between 10-20% of a vehicle’s value. However, they can also trade in their old vehicle and pay some or all of the deposit with it. They then agree to make monthly payments through the length of the contract, which is typically between 36 and 48 months.

Does the buyer actually own the vehicle during the PCP contract?

The vehicle doesn’t actually belong to the driver whilst they are still under a PCP contractor. Typically, the vehicle is in the name of the PCP provider. When the contract period is coming to an end, the buyer can make what’s known as a ‘balloon’ payment so the rest of the balance can be settled. If the buyer does decide to do this, the vehicle will be transferred into their name. If they don’t want to purchase the car, they can simply hand it over and start a new PCP deal. A recent study found that 90% of cars were now being purchased under PCP finance agreements.

How many people have been mis-sold PCP?

The Financial Conduct Authority found that more than 560,000 borrowers had been mis-sold PCP and could make PCP claims or car finance claims. One of the reasons PCP finance has become so controversial is that there have been many complaints about transparency, or the lack of it. There have been many reports about customers being offered different rates to each other and deception around high interest rates, add-on insurance, hidden fees and vague, unclear wording appearing in PCP contracts.

Meeting the criteria

There’s a good chance you might be able to make a mis sold PCP claim if you feel the fees, total costs and interest rates linked to your PCP contract weren’t explained to you clearly. You may also be able to make a claim if the rates that you were offered weren’t as competitive as they should have been, or if the person selling the finance product to you didn’t fully tell you how ownership of the vehicle worked. If you weren’t informed about mileage limits, you may also wish to make a claim. Perhaps your seller had reason to believe that a loan was not affordable for you but proceeded to sell it anyway? This is yet another reason that you might have a case to make PCP claims or PCP car finance claims.

Other reasons you may have been mis-sold PCP finance

  • The lender didn’t tell you about other financial products that may have been more suitable
  • You were pressurised into purchasing add-on insurance you didn’t need
  • You weren’t told about high charges for damaging the vehicle.

How much compensation am I likely to receive from a PCP finance claim?

If you have been mis-sold PCP, you may be able to mis sold PCP claim up to £10,000 in compensation or possibly more if you bought cover for multiple vehicles. The average PCP claims stand at around £3,000. You can expect to receive the funds that you paid back alongside 8% compensation after making PCP car finance claims.

Which factors might influence how much I receive for PPC claims?

  • Factors that may influence how much you are paid include
  • How much you have paid so far
  • The length of the agreement
  • Your vehicle’s value, condition and age
  • The amount and interest that’s been mis-sold

It’s best to make a mis sold PCP claim as soon as you can if you suspect that you have been mis-sold PCP. The earlier your PCP claims are made, the bigger the likelihood of it being upheld and paid in full.

When will my PCP claim be paid?

There are several factors that might determine how long it takes for PCP claims to be paid. These include how strong your case is, how much is owed and the dealership you were sold the product by. It can take just four weeks for some claims to be processed, reviewed and completed, but some people have had to wait up to 12 months to see an outcome after making PCP car finance claims.

What can I do to strengthen my case?

If you want your PCP claims to be as strong as possible, collect as much relevant information as you can. This can include correspondence that you received about your contract and pre-contract documentation. Don’t dispose of anything you feel could help your case if you want to make a mis sold PCP claim. If you don’t have much evidence to back up PCP car finance claims, you may still be able to make PCP claims as long as you can explain what occurred in detail.

Can I make a claim if I purchased a second-hand vehicle?

Yes, it is possible to make PCP claims if you bought a second-hand car or a used car with PCP finance. You can still apply for a maximum of ten years after you signed your contract. The figure that you receive for PCP car finance claims is likely to be influenced by the age, condition and road value of your car.


If you feel that you have been mis-sold PCP, it’s a good idea to make a claim as soon as you possibly can. The vast majority of claimants are successful after making PCP claims. These mis sold PCP claims are being made for a whole host of reasons, which can include terms not being clearly explained, buyers receiving less competitive rates than they should have been and information being withheld, such as details about mileage rate limits and so on. As long as you think you have been mis-sold PCP at some point over the past decade, it’s a very wise move to start thinking about making PCP claims or PCP car finance claims so you can get back what you’re entitled to.

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