Updated: 22 June 2026
Originally Published: 23 June 2025
As the car finance scandal continues to develop, many motorists are asking whether only PCP agreements qualify for compensation, or whether other forms of vehicle finance are included as well.
This is an important question because Personal Contract Purchase (PCP) is only one of several ways consumers have financed vehicles over the past two decades.
The FCA's motor finance redress scheme covers a much wider range of agreements than many people realise.
In fact, PCP claims, HP claims, and many Lease Purchase agreements may all fall within the scope of the FCA's review, provided they meet the relevant eligibility criteria.
It is helpful to know which agreements are included, as FCA estimates there are around 12.1 million agreements signed between 6 April 2007 and 1 November 2024 that may be impacted [1].
This guide covers what products are included, how mis-sold car finance is being calculated, if mis-sold HP car finance is included, and all you need to know about PCP claims, car finance compensation, car finance refunds, and the latest FCA car finance updates.
What finance products are included in the FCA car finance review?
The FCA isn’t just looking at PCP car finance.
The FCA’s review will affect a wide range of regulated credit agreements that are entered into to finance vehicles between 6 April 2007 and 1 November 2024.
This means eligibility will be based less on the name of the product and more on the legal form the agreement takes.
In simple terms, most regulated vehicle finance agreements may potentially be reviewed if concerns exist around commission arrangements, disclosure practices, lender recommendations, or other aspects of the sales process.
The main categories include:
- PCP car finance
- Hire Purchase agreements
- Lease Purchase agreements structured as conditional sale agreements
Personal Contract Hire agreements are generally not included because they are rental arrangements rather than regulated credit agreements.
PCP claims and the FCA redress scheme
PCP car finance remains the most commonly discussed product in the wider car finance scandal.
Under a PCP agreement, consumers typically pay a deposit, monthly instalments, and have the option of making a final balloon payment to own the vehicle. If you are unfamiliar with how these agreements work, it may be worth reading our guide to what PCP car finance is and how it works before exploring potential eligibility for compensation.
Many PCP car finance claims relate to concerns that commission arrangements were not properly disclosed or that consumers were not given enough information about how borrowing costs were determined.
The FCA has identified several areas of concern that continue to drive PCP finance claims across the UK.
These include:
- Discretionary Commission Arrangements (DCAs)
- excessive commission structures
- restricted lender choice
Consumers who want a more detailed explanation of the issues behind mis-sold PCP car finance can also read our guide to PCP mis-selling and how to make a PCP claim.
Are HP claims included?
Yes.
Hire Purchase agreements are fully included within the FCA's approach to motor finance compensation.
HP agreements are regulated credit agreements and are therefore subject to many of the same disclosure and fairness requirements as PCP car finance.
Many examples of mis-sold HP car finance involve concerns similar to those seen in PCP car claims.
These include:
- commission arrangements not being explained properly
- only one lender being presented
- borrowing costs not being disclosed clearly
- consumers feeling pressured into signing agreements
For this reason, HP claims form a significant part of the FCA's wider review of historic motor finance agreements.
What about Lease Purchase agreements?
Lease Purchase agreements often create confusion because of the word "lease".
Despite the name, Lease Purchase is usually a form of regulated credit rather than a rental agreement.
Unlike PCP car finance, there is generally no option to return the vehicle at the end of the agreement. Consumers are expected to complete the purchase through a final balloon payment.
Because many Lease Purchase agreements are structured as conditional sale agreements, they are often treated similarly to PCP and HP agreements for the purposes of FCA car finance reviews.
Which agreements are not covered?
The most notable exclusion is Personal Contract Hire (PCH).
PCH is a long-term vehicle rental agreement rather than a regulated credit agreement.
Consumers never own the vehicle and simply return it at the end of the contract.
Because PCH does not operate as regulated credit, it generally falls outside the FCA's current redress framework.
Why are PCP and HP claims receiving so much attention?
The regulator estimates:
- approximately 12.1 million agreements could fall within scope
- around 75% of affected consumers may ultimately receive compensation
- total industry compensation could reach approximately £7.5 billion
These figures have transformed PCP claims and HP claims from a niche consumer issue into one of the largest financial redress programmes ever proposed in the UK.
The latest FCA car finance update
While the FCA announced its compensation framework in March 2026, implementation has become more complicated following legal challenges [3] from:
- Consumer Voice
- Volkswagen Financial Services
- Mercedes-Benz Financial Services
- Crédit Agricole Auto Bank
The FCA has confirmed that these legal challenges are unlikely to be heard before October 2026 [4].
As a result, compensation payments that many expected during 2026 are now increasingly expected to begin during 2027.
Consumers should therefore be cautious about anyone promising guaranteed payouts 2026.
How can I tell if I might be eligible?
You may want to look into this further if:
- you signed your agreement between 6 April 2007 and 1 November 2024
- commission was not explained clearly
- you were not given a choice of finance options
- you were not told about the total cost of borrowing
- you were not given important information in plain and understandable language
- you were rushed or felt under pressure to make a decision
How to find out if your agreement is included
Many consumers no longer have their original paperwork.
For this reason, many motorists start with a PCP claim checker or car finance refund checker.
These tools are frequently available from claims management companies and finance claims experts, and are designed to assess whether an agreement might possibly fall within the FCA review period.
Most checkers only need a few basic details such as:
- name
- date of birth
- address history
- contact details
Some can also trace historic agreements using credit reference data and vehicle registration details.
Consumers who are ready to investigate further can also use our dedicated PCP claims eligibility checker to understand whether their agreement may warrant further review.
How much compensation could be available?
The FCA currently estimates average compensation at approximately £829 per eligible agreement [5].
Actual outcomes may vary significantly depending on:
- the size of the finance agreement
- commission arrangements involved
- lender practices
- individual circumstances
Potential outcomes could include:
- car finance compensation
- car finance refund payments
- PCP refund payments
- interest refunds
- commission-related redress
Frequently asked questions
Are PCP claims covered by the FCA redress scheme?
Yes. PCP claims are another large element of the FCA's motor finance review. The FCA's redress scheme relates to many Personal Contract Purchase agreements entered into between 6 April 2007 and 1 November 2024 where there are concerns around commission arrangements, disclosure or other elements of the sales process.
Are HP claims covered by the FCA redress scheme?
Yes. Hire Purchase agreements are regulated credit agreements and are included within the FCA's approach to motor finance compensation. Many HP claims involve concerns similar to those seen in PCP claims, including commission disclosure and lender recommendation practices.
Is it possible to make a claim for mis-sold HP car finance?
Yes, possibly. If you entered into an HP agreement at any time from 2007 to 2024 you may want to find out more, if any of the following apply to you; commission arrangements were not disclosed to you, borrowing costs were not explained or you did not have sufficient information to make an informed decision.
Does this include Lease Purchase agreements?
Most Lease Purchase agreements are conditional sale agreements and so may be included in the FCA's review. The question of whether a particular lease purchase agreement will be eligible for the review will depend on the precise legal nature of the agreement and the circumstances in which the sale took place.
Is Personal Contract Hire (PCH) covered?
In most cases no. Personal Contract Hire is a vehicle rental agreement and not a regulated credit agreement. Since the motorist does not own the vehicle, a PCH agreement is unlikely to fall under the FCA’s existing redress scheme.
What is a PCP claim check?
A PCP claim check is a preliminary check of eligibility. It can highlight the possibility that a Personal Contract Purchase agreement may be eligible for further consideration. Many motorists take the first step by completing a PCP claim check before choosing whether to start a formal claim.
What is a car finance refund check?
A car finance refund check is a wider eligibility check that can include PCP, HP and other qualifying car finance agreements. This will identify to the consumer whether the agreement is potentially eligible within the FCA review period and whether there are potential indicators of car finance mis-selling.
How do I use a PCP claim check or car finance refund check?
Most PCP claim check and car finance refund check tools can be completed online in a few minutes. Consumers are typically asked for basic information such as their name, date of birth, address history, and contact details. Some providers can also help trace older agreements where paperwork has been lost.
Can I make a claim if I no longer have the paperwork?
Yes. Many consumers exploring PCP claims and HP claims no longer have their original agreements. Historic agreements can often be traced through credit reports, lender records, vehicle registration information, or a car finance refund check.
Can I make a claim if I have already paid off the finance?
Yes. Many PCP finance claims and HP claims relate to agreements that have already been completed, settled, or where the vehicle has since been sold.
How much compensation could be available?
The FCA estimates the average compensation payout will be around £829 per eligible agreement. This could vary depending on individual circumstances. PCP compensation claims or car finance claims can consist of a car finance refund, PCP refund, interest refunds and/or other types of redress.
When will compensation be paid?
While the FCA announced its motor finance redress scheme in March 2026, legal challenges have created uncertainty around implementation. Compensation payments that many expected during 2026 are now increasingly expected to begin during 2027.
Can I complain directly to my lender?
Yes. The FCA continues to advise consumers that they can complain directly to their lender free of charge.
Consumers may also choose to seek support from a regulated claims management company or other professional representative if they prefer assistance with the process.
If you are considering professional representation, our guide on choosing the best PCP claims company explains the factors worth considering before making a decision.
If your complaint has already reached the Financial Ombudsman Service and you are experiencing delays or difficulties with lender responses, our article on what to do if your car finance company ignores the Ombudsman may also be useful.
Final thoughts
The FCA's review is not limited to PCP car finance.
While PCP claims remain the most widely discussed aspect of the car finance scandal, HP claims and many Lease Purchase agreements may also qualify for review where concerns exist around commission, disclosure, or sales practices.
For consumers unsure whether their agreement is affected, a PCP claim check or car finance refund check can provide a useful starting point while the FCA's compensation process continues to develop.
Those looking to understand the broader process can also explore our dedicated PCP claims hub, which brings together guides on eligibility, compensation, FCA developments, and common questions surrounding PCP finance claims.
_________
References:
- FCA estimates there are around 12.1 million agreements signed between 6 April 2007 and 1 November 2024 that may be impacted - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- The conversation changed significantly in March 2026 when the FCA formally announced its nationwide motor finance redress scheme - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- implementation has become more complicated following legal challenges - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
- The FCA has confirmed that these legal challenges are unlikely to be heard before October 2026 - https://cardealermagazine.co.uk/car-finance-compensation-payouts-pushed-back-until-at-least-2027/324762
- The FCA currently estimates average compensation at approximately £829 per eligible agreement - https://www.bbc.com/news/live/czx94evl5lrt