Start your mis-sold PCP finance claim

Have you had a car on finance with PCP or HP?

As featured on

Daily Mail The Sun Evening Standard

PCP Car Finance Claims

Author: Jack Lloyd
Updated: May 24, 2022
21 minutes read

What Is A Mis-Sold PCP Claim?

If in the last six years, you were not made aware of any commission being charged when organising your car finance, or if the advice given was considered poor or negligent, then you may have been a victim of mis-sold car finance.

The lender may have misled you about any extra costs involved, or they may have charged you more interest than agreed.

Some dealerships are overcharging customers £1000s in interest charges in order to gain larger commission payouts. According to the Financial Conduct Authority (FCA), this is unacceptable.

A couple seated in a car dealership talking to a sales person

Common Types of Mis-Sold Car Finance Claims

Here are some of the most common types of mis-sold car finance claims:

Undisclosed Commission

The FCA has reported thousands of cases where customers were not aware of any commission payments.

If the salesperson received a payment or commission for bringing the car finance deal to the bank and you were not informed of this, then it is classed as a hidden, secret, or undisclosed commission.

The finance provider or bank must notify you of all the fees within the transaction.

Pressured Sales

If at any point during the transaction you felt under pressure to sign a finance agreement that you didn’t feel was right for you, you may be able to claim compensation.

You need to have been given enough time to process the deal and find an alternative option if unhappy.

No Thorough Affordability Checks

Often, customers will enter into a loan agreement that is not catered to their financial situation. As a result, this leaves them trapped in a PCP deal that they are in no position to pay for.

If you felt your financial agreement was not properly processed then you may be able to claim.

Interest Overcharges

A lot of cases have seen that customers have been overcharged thousands in interest so that the dealership can obtain higher commissions.

Emissions Scandal Claims

Currently, there is a range of car manufacturers being investigated for tampering with their diesel emissions.

It’s possible that if you have entered a PCP agreement on the basis that you were receiving a type of car with a specific set of emissions, then you have been mis-sold.

If this is true, you could look into claiming compensation via the PCP agreement you entered at the time.

What Can You Claim Compensation For?

People who have had their car finance agreement mis-sold can potentially claim back thousands in compensation if they believe they have experienced any of the issues listed above.

When the claim is brought forward, the finance agreement not only ends, but you potentially receive compensation to help settle where you were financially, before being mis-sold. This can end up being thousands of pounds.
If the lender has gone out of business and is not able to pay you anything, then the Financial Ombudsman Service can also compensate you.

Who Can Claim Mis-Sold PCP Compensation?

If in the last six years, you bought a car via a finance agreement, then you may be eligible to claim mis-sold car finance compensation.

You may be eligible to claim if:

  • You purchased your car via car finance or PCP agreement

  • This was between March 2016 and December 2020

  • You received negligent or poor advice in relation to your car finance options

  • You were not made aware of any commission being charged within the agreement

How Is Compensation Calculated?

Some customers have been charged thousands more than they should have. Although the exact amount of compensation will vary with every claim, there are several factors to take into account:

The size of the loan, the larger the loan, and the more you’ll likely be owed.

The date of when you signed up, the longer you have been paying off the loan, the more you’ll likely be owed.

The interest rate and the difference between the rate you should have actually been quoted.

What Is The PCP Claim Process?

Talk To The Finance Provider

Before making a claim, you need to speak to your finance provider or credit broker first. They need to be given the opportunity to hear your concerns and correct any wrongdoing.

For most complaints, they have eight weeks to provide a final response to you.

Financial Ombudsman Service

If the finance provider doesn’t offer you a satisfactory response or is non-responsive, then you can start to form a complaint.

You can then bring that complaint forward to the Financial Ombudsman Service (FOS) and provide details of your complaint, a copy of the car finance agreement, and any other evidence and correspondence with their complaints department.

To send their first initial assessment of your case, the FOS can take up to three months.

Breakdown of a Hidden Commission

A hidden commission is when someone like a finance broker sells you a loan or finance agreement from the bank or lender.

When it comes to car finance, it might be the salesperson or dealership who brokers the finance deal.

If that salesperson then receives a fee or commission for bringing the car finance deal to the bank and the bank has not informed you of this, then that is considered a hidden, secret or undisclosed commission.

The finance provider or bank must inform you of all fees within the transaction.

Here we have broken down the process:

  1. Customer

  2. Car Dealership/Salesperson

  3. Hidden, Secret or Undisclosed Commission

  4. Finance Provider/Bank

At the point of the car sale, the car dealership must inform you how much the commission is.

If this has not been made clear, it is considered a form of fraud. Both the finance provider and broker may be liable for possible claims.

Financial brokers should do the following when it comes to selling car finance:

  • Always have the customer's best interest

  • Remain neutral with every bank, lender and finance provider

  • Always disclose any profit made to the customer

  • Never charge a higher interest for a higher commission

What is No Win No Fee

A 'no win, no fee' agreement is sometimes referred to as a ‘conditional fee agreement’ this is an arrangement between you and your chosen solicitor. The benefit of this is if your compensation claim is unsuccessful, you will not have to pay a contingency fee for your lawyer's services, a Termination Fee can sometimes apply.

The applicable fee is based on which solicitor you choose to use. Our panel currently consists of a number of law firms, which can also be found on privacy policy under "who we may share your data with". No win No Fee varies, but is generally between 30% - 42%, including VAT.

Related articles