Updated: 30 October 2025

Originally Published: 10 January 2025

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Personal Contract Purchase can feel simple on day one and confusing years later. As more drivers revisit their paperwork, many are finding signs of mis-selling such as undisclosed commission, inflated interest, thin explanations, or limited lender choice. If you are weighing up a mis-sold PCP claim, this guide explains what changed in 2025, what counts as unfair, how compensation is expected to be calculated, and how to get your complaint ready.

Before we dive in, here are the headline numbers that the Financial Conduct Authority has shared in its modelling for the upcoming redress scheme[1] :

• Typical payment per eligible agreement: about £700 on average.
• Estimated total redress across the industry: up to £8.2 billion.

These are market-wide estimates, not guarantees for an individual case, but they are useful guide rails as you assess your position.

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What changed in 2025 that affects PCP finance claims?

Three developments set the direction for the next phase of PCP complaints.

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Supreme Court guidance in August 2025 [2].

The Court confirmed that commission itself is not automatically unlawful. The key question is whether the commission was hidden from the customer, unusually high for the transaction, or shaped the price the customer paid. Where those facts are present, the agreement can still be unfair under the Consumer Credit Act. This means many mis-sold PCP claims remain viable.

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FCA complaint pause until 4 December 2025 [3].

To deliver consistent outcomes, the FCA has paused final responses for commission-related complaints, including PCP claims, until 4 December 2025. You can still submit a complaint today. Doing so logs your case so it can be assessed as soon as the pause lifts.

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FCA redress consultation and timetable [4].

A six-week consultation opened in October 2025 to design a single UK-wide approach for agreements entered between 6 April 2007 and 1 November 2024. Final rules are expected in early 2026, with compensation to follow later in 2026. The consultation includes a proposed milestone of 31 July 2026 for lenders to issue final responses to eligible complaints.

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What does the FCA’s modelling say about car finance claims?

The regulator’s current modelling indicates a typical payment of around £700 per eligible agreement, and total redress of up to £8.2 billion across the market if the scheme proceeds as proposed [5]. Your outcome will depend on the size of your loan, the interest charged, the length of your agreement, and how the commission was handled.

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What exactly is a mis-sold PCP claim?

A mis-sold PCP finance claim is a complaint that your agreement was not explained or priced fairly. It usually rests on one or more of the following:

Discretionary commission arrangements. The dealer could influence your interest rate and earn more if the rate rose. Many customers were not told how this incentive worked.

High commissions. Some agreements paid unusually large commissions to the dealer or broker. Very high levels can distort the sale even if the small print said a commission might be paid.

Restricted lender access. Some customers were shown only one lender without a real comparison across the market.

Key costs not explained. Balloon payments, mileage limits, wear and tear charges, the guaranteed future value, and the total amount payable should have been set out clearly.

Affordability not assessed. Firms should check if the agreement is sustainable based on your finances.

Pressure selling. Rushed signings or suggestions that an offer would disappear if you took time to think can support a complaint.

You do not need every item on the list. One well-evidenced problem can be enough.

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Is a PCP claim only for brand-new cars?

No. PCP is widely used for both new and used vehicles, and also for motorcycles and vans. If the finance product was a PCP and the sale meets the unfairness tests, a claim is possible.

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Can I make a PCP claim if my agreement has already finished?

Yes. Agreements that ended years ago are still considered. Commission-related cases typically focus on agreements between 2007 and 2024 when the commission ban took effect. The FCA’s final rules will explain how older files are treated. If you are unsure, submit your complaint now so you are in the queue.

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Can I include more than one vehicle?

Yes. If you had several PCP agreements, you can raise them together to keep the admin tidy. Each agreement will still be assessed on its own facts.

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What evidence helps my PCP claim?

Send what you have and request anything missing.

• PCP agreement and pre-contract credit information
• Dealer or broker emails, texts, and sales quotes
• Payment statements or bank records showing repayments
• Notes that show what you were told about interest, commission, mileage, wear and tear, and the balloon payment
• Final settlement figures or voluntary termination paperwork if relevant

If something is missing, ask the lender for copies. A representative can also request these on your behalf if you later choose professional help.

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How much compensation can I expect for a mis-sold PCP claim?

There is no single figure, but the FCA’s modelling provides a benchmark. It points to a typical payment of about £700 per eligible agreement, with industry-wide redress up to £8.2 billion. Your own result depends on the loan size, term, rate, and how commission influenced pricing. Treat any online calculator as a rough guide rather than a promise.

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How long do PCP claims take?

In normal circumstances, a lender has up to eight weeks to reply. Because of the current pause, most commission-related final responses will resume after 4 December 2025. If you escalate to the Financial Ombudsman Service [6], allow several months for a decision. The most productive step now is to submit your complaint and gather documents so your case is ready.

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Do I need a claims company or a solicitor?

You can complain yourself for free. Many people do. Others prefer support from a regulated claims management company or a solicitor.

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Claims management company

Well-suited to standard PCP cases and customers who want a hands-off experience. Many work on a no win, no fee basis with success fees typically between 18 and 36 percent including VAT.

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Solicitor

A better fit for complex or defended matters. Fee models vary. Ask for terms in writing and check whether you could be liable for any costs if litigation is required.

Whichever route you pick, check regulation, experience, and fee transparency.

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What does no win, no fee mean here?

You do not pay upfront. If your claim succeeds, the firm takes the agreed percentage from your compensation. If the claim fails, there is no success fee. Always read the client agreement carefully so you understand what is included and what is not.

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Is there a PCP claim calculator?

Some providers offer calculators that estimate refunds based on loan amount, APR, and term. Treat the result as an estimate only. The eventual figure will follow the FCA’s final redress formula and your evidence.

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My lender rejected my complaint. What now?

You can refer your car finance claim case to the Financial Ombudsman Service within six months of the final response. The FOS is free and independent. It can direct a lender to pay redress where it upholds a complaint.

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Do I need all documents before I start?

No. Helpful, but not essential. Submit a clear summary of what went wrong and ask the lender for copies of your agreement and statements. Add more evidence as it arrives.

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Should I wait because of the pause?

No. Send your complaint now so it is logged and in the queue. The pause delays final decisions, not the ability to complain. Being early can help when assessments restart.

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What are the time limits?

The usual rule is six years from the event or three years from when you first knew, or ought reasonably to have known, you had cause to complain. The FCA’s scheme is expected to set specific timelines for commission-related cases. If you are unsure, submit the complaint and let the firm consider it under the rules in place.

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I am not sure if mine was mis-sold. What should I check first?

Give yourself a short checklist.

• Were the balloon payment, the total amount payable, and end-of-term choices explained in plain English?
• Were mileage limits realistic for your driving, and were excess charges set out?
• Did anyone explain that the dealer could change your interest rate, or that a commission was involved?
• Were you shown genuine alternatives or only one lender?
• Did the monthly payment fit a sensible household budget once bills were covered?

If two or more answers raise concerns, a claim is worth exploring.

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Can I claim if my car was repossessed or I used voluntary termination?

Yes. The question is whether the agreement was mis-sold, not how it ended. Include any repossession or voluntary termination paperwork with your complaint.

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What costs are usually refunded if a PCP claim succeeds?

Outcomes vary by case. Typical elements include:

• Refund of overpaid interest where commission increased the rate
• Repayment of undisclosed commission that affected your cost
• Refund of unfair fees or add-ons
• Simple interest on the redress amount
• Corrections to your credit file where appropriate

The FCA’s final rules will set the precise redress method for scheme cases.

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Will the FCA scheme cover every type of mis-selling?

The consultation focuses on commission-related unfairness for agreements between 6 April 2007 and 1 November 2024, with particular attention to the years before the ban on discretionary commission in 2021. Other issues can still be raised through normal complaint routes and with the Ombudsman. Watch for the FCA’s final rules in early 2026.

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How to submit a mis-sold PCP claim?

1) Gather what you have.

Agreement, pre-contract credit information, sales quotes, payment records, and any emails or letters. If something is missing, ask the lender for copies.

2) Write a clear summary.

Two or three short paragraphs are enough. Explain what happened and why it matters to cost or consent. Example:

I was not told that the dealer could adjust my interest rate to earn a commission. I believe this increased what I paid under my PCP. Please confirm whether a commission was paid, explain how my rate was set, and review my account for a refund of any overpaid amounts.

Include your full name, address, agreement reference, and contact details.

3) Send the complaint.

Use the lender’s online form, email, or post. Keep a copy and note the date sent.

4) Track the timeline.

In normal times the firm has eight weeks. Final responses for commission cases are paused until 4 December 2025, but your place in the queue should be preserved.

5) Escalate if needed.

If you disagree with the outcome or receive none after the process resumes, refer the case to the Financial Ombudsman Service within six months of the final response.

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Can you give me a summary of fast facts at a glance?

Covered period for the proposed scheme: 6 April 2007 to 1 November 2024

Common grounds: discretionary commission, high commissions, restricted lender access, poor explanations, affordability concerns

Average payment per eligible agreement: about £700 based on FCA modelling

Estimated industry-wide redress: up to £8.2 billion, depending on uptake

Complaint pause ends: 4 December 2025

Final FCA rules expected: early 2026

Proposed deadline for lender final responses: 31 July 2026

Compensation payments expected to begin: later in 2026

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Bottom line

If your PCP was not explained properly, if a commission structure allowed a dealer to lift your rate without clear disclosure, if you were shown only one lender, or if affordability checks were thin, you may have a strong claim. The regulator’s modelling points to average compensation of around £700 per eligible agreement and total redress up to £8.2 billion across the market. Final rules are due early 2026, with payments later in 2026, and a proposed 31 July 2026 deadline for lender responses.

The best step you can take today is simple. Gather your documents, write a short honest account, and submit your complaint so it is in the queue. You can do this yourself for free, or you can ask a regulated professional to help. Either way, starting now puts you in the strongest position when the new rules go live.

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References:

1. the Financial Conduct Authority has shared in its modelling for the upcoming redress scheme - https://www.fca.org.uk/publication/consultation/cp24-15.pdf
2. Supreme Court guidance in August 2025 - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
3. FCA complaint pause until 4 December 2025 - https://www.fca.org.uk/news/statements/firms-given-until-december-2025-respond-motor-finance-commission-complaints
4. FCA redress consultation and timetable - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
5. total redress of up to £8.2 billion across the market if the scheme proceeds as proposed - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme
6. escalate to the Financial Ombudsman Service - https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/credit-borrowing-money/car-finance/complaints-about-commission