Updated: 01 June 2026
Originally Published: 10 January 2025
PCP claims remain one of the biggest consumer finance stories in the UK.
Since this article was last refreshed in October 2025, the situation has changed significantly. The Financial Conduct Authority formally confirmed its nationwide motor finance redress scheme on 30 March 2026 [1], creating a structured compensation framework for millions of motorists who may have been affected by car finance mis-selling between 2007 and 2024.
That means many consumers are now asking practical questions:
- What exactly are PCP claims?
- How do I know if my agreement was unfair?
- What counts as mis-sold PCP?
- How much car finance compensation could be available?
- How do PCP claims checks work?
- Are PCP claim scams becoming more common?
- Should I use a PCP claims company?
- What do Scheme 1 and Scheme 2 actually mean?
This is an updated FAQ to cover the most common questions we’re hearing from motorists in 2026 about mis-sold PCP claims, car finance claims, the FCA car finance redress scheme, and expected compensation payouts 2026.
What are PCP claims?
PCP claims are complaints made about Personal Contract Purchase (PCP) agreements that may have been mis-sold or arranged unfairly. The main period for which the FCA car finance redress scheme is looking into these claims is between 6 April 2007 and 1 November 2024.
The fact of a PCP agreement itself is not automatically an issue. The issue is whether information was hidden, unclear or misleading at the point of sale.
The most common issues raised in PCP claims concern:
- hidden commissions
- misleading interest rates
- unclear balloon payments
- inadequate affordability checks
- limited choice of lenders
- failure to explain total borrowing cost
In some cases, dealerships may have been able to increase the interest rate a customer pays in order to receive a higher commission from the lender. Many customers have said this was never explained to them.
These issues now sit at the centre of the wider car finance scandal affecting millions of UK motorists.
What is a mis-sold PCP claim?
A mis-sold PCP claim is a complaint that a PCP agreement signed between 2007 and 2024 was not sold fairly or transparently.
The majority of mis-sold PCP claims we see say that:
- commission was not disclosed
- the interest rate was high
- finance charges were not explained
- customers were pressured to sign
- weak affordability checks were carried out
- only one lender was used
You do not have to have every issue to make a claim.
One significant failing may be enough to support a car finance claim depending on the circumstances.
What is PCP mis-selling?
PCP mis-selling is unfair or misleading sales practices in the selling of a Personal Contract Purchase agreement. It became a large regulatory concern following an FCA probe into discretionary commission arrangements (also known as DCAs). Prior to January 2021, some dealers and brokers could raise a customer's interest rate and receive higher commissions from lenders in exchange.
However, millions of agreements signed before the ban remain under review.
What changed in 2026?
The biggest change was the launch of the FCA’s nationwide redress scheme on 30 March 2026.
The FCA estimates:
- around 12.1 million agreements could potentially fall within scope [3]
- total compensation across the industry could reach approximately £7.5 billion
- average redress may sit around £829 per eligible agreement [4]
This transformed PCP finance claims from a growing complaints issue into one of the UK’s largest financial compensation programmes.
The scheme applies primarily to agreements signed between 6 April 2007 and 1 November 2024.
What counts as mis-sold car finance?
Mis-sold car finance usually means the customer was not given clear, fair, or complete information before entering the agreement.
Common concerns include:
- undisclosed commissions
- excessive commissions
- inflated APRs
- unclear finance terms
- weak affordability checks
- pressure selling
- unexplained add ons
- poor explanation of PCP balloon payments
Not every agreement was mis-sold.
However, many consumers are now reviewing older agreements to understand whether hidden commission structures increased the cost of borrowing.
How do I know if my PCP agreement may be affected?
Many motorists only realise years later that something about the agreement felt unclear.
Possible signs include:
- nobody explained commission
- your APR seemed unusually high
- you were only shown one lender
- the balloon payment was unclear
- affordability checks felt rushed
- add ons appeared without proper explanation
- you felt pressured into signing quickly
These signs are not a surefire way to know if you are entitled to car finance compensation, but they may indicate that your agreement is worth checking out.
What is a PCP claims check?
A PCP claims check is an early eligibility review used to assess whether your agreement may potentially fall within the FCA car finance redress scheme.
Many PCP claims companies now offer online checks that only require:
- your name
- date of birth
- address history
- contact details
Finance claims experts may be able to locate older agreements using credit reference data or car registration information.
This is especially useful if:
- paperwork is missing
- you changed address
- you changed surname
- you cannot remember the lender
- you had several vehicles financed over time
What is a car finance refund check?
A car finance refund check works similarly to a PCP claims check.
The aim is to identify whether your agreement may potentially qualify for:
- a car finance refund or a PCP refund
- compensation linked to hidden commissions
- excess interest refunds
- other forms of car finance compensation
A refund check does not guarantee success. It simply helps identify whether your agreement may be worth reviewing further.
Can I claim without paperwork?
Yes.
Many motorists no longer have their original finance paperwork, especially where agreements were signed years ago.
Missing documents are extremely common in PCP finance claims and do not automatically prevent a car finance claim from progressing.
Many consumers still qualify for mis-sold PCP claims even if they:
- moved house
- changed surname
- no longer own the vehicle
- cannot remember the lender
- lost agreements or statements
- had several PCP agreements over time
Many PCP claims companies and finance claims experts can often trace agreements using:
- your full name
- date of birth
- address history
- vehicle registration information
- credit reference agency data
Useful documents may still include:
- finance agreements
- settlement letters
- payment statements
- dealership emails
- bank statements
- vehicle registration details
However, not having these documents does not automatically stop a complaint.
How much car finance compensation could be available?
The FCA currently estimates:
- overall average compensation may be around £829
- newer agreements may average around £881
- older agreements may average around £734
Some consumers may receive significantly more depending on:
- the size of the agreement
- the interest charged
- the commission structure involved
- financial loss suffered
Potential compensation may include:
- refunds of excess interest
- commission related refunds
- compensation for unfair costs
- additional interest
- credit file corrections in some cases
Can I make a PCP claim if my agreement has finished?
Yes.
Many car finance claims involve agreements that ended years ago.
The vast majority of agreements signed between 2007 and 2024 will be covered by the FCA redress scheme. This is even if the finance agreement has come to an end.
This means many motorists who thought it was too late may still potentially qualify.
Can I claim for more than one vehicle?
Yes.
If you had multiple PCP agreements, each agreement can usually be reviewed separately.
Some consumers had several vehicles financed over the years, especially where PCP was repeatedly used to upgrade vehicles every few years.
How long will PCP claims take in 2026?
Timelines vary depending on:
- the lender
- the agreement date
- the complexity of the complaint
- FCA implementation deadlines
Under FCA expectations, the scheme:
- for firms with 2014 onward agreements should be implemented by 30 June 2026
- for firms with older agreements should be implemented by 31 August 2026
- will mostly see compensation payments made during 2026 and 2027
May take longer for complaints that involve disputes or issues with historic evidence.
How do I make a complaint for mis-sold PCP car finance?
Consumers generally have three main options when making a complaint about PCP mis-selling or car finance mis-selling.
1. Making a complaint yourself
You can complain directly to the lender yourself for free.
This route may suit consumers who:
- still have their paperwork
- are comfortable handling lender communication
- want to avoid paying success fees
- only had one agreement
Consumers usually submit:
- complaint details
- agreement information
- supporting evidence
- reasons why they believe the agreement was unfair
If the lender rejects the complaint, the case may potentially be escalated to the Financial Ombudsman Service.
2. Using a solicitor or law firm
Some consumers choose solicitors for more complex disputes.
Solicitors working in England and Wales are regulated by the Solicitors Regulation Authority.
This route may be more suitable where:
- the agreement is legally complex
- court proceedings become necessary
- multiple disputes are involved
- consumers want formal legal representation
However, fees may sometimes be higher than other complaint routes.
3. Using a PCP claims company
Many consumers choose a PCP claims company because they want support managing the process.
Claims management companies handling regulated financial complaints must be authorised by the FCA.
A PCP claims company may help:
- trace missing agreements
- gather evidence
- communicate with lenders
- monitor FCA updates
- explain eligibility
- manage paperwork and complaint handling
Some motorists go down this route due to the fact that older agreements can be hard to trace. This can often be the case where finance was taken out many years ago.
Prior to signing up to any company, consumers should:
- check FCA authorisation
- understand fees clearly
- request written terms
- avoid businesses guaranteeing compensation
- be cautious of PCP claim scams
What is the FCA car finance redress scheme?
The FCA car finance redress scheme is the nationwide compensation framework formally introduced by the Financial Conduct Authority on 30 March 2026.
The scheme was created after years of complaints, investigations, court rulings, and regulatory scrutiny linked to the wider car finance scandal.
The FCA estimates that:
- there may be around 12.1 million agreements in scope
- the overall level of industry-wide compensation could be in the region of £7.5 billion
- the average amount of compensation could be around £829 for an eligible agreement.
The scheme will cover sales of PPI alongside the following types of agreements, with a particular focus on:
- discretionary commission arrangements
- hidden commissions
- excessive commission structures
- unfair finance relationships
- other car finance mis-selling
The agreements must have been entered into between 6 April 2007 and 1 November 2024.
What are Scheme 1 and Scheme 2?
The FCA redress scheme operates across two implementation periods, sometimes referred to informally as Scheme 1 and Scheme 2.
Scheme 1
Scheme 1 primarily covers agreements signed between 1 April 2014 and 1 November 2024.
Under the FCA timetable:
- firms must implement the scheme by 30 June 2026
- complaint outcomes should begin progressing shortly afterwards
- compensation payments are expected throughout late 2026 and 2027
The FCA estimates average compensation for these agreements may be around £881.
Scheme 2
Scheme 2 mainly covers older agreements signed between 6 April 2007 and 31 March 2014.
Per FCA timescale:
- Firms need to have the scheme in place by 31 August 2026.
- Older deals may take longer as historic records may be harder to trace.
- Some lenders will require more time to track down legacy files.
Average redress figure for these deals has been floated at £734.
What does the FCA scheme cover?
The FCA scheme focuses on whether customers were treated fairly when their finance agreements were arranged.
This includes concerns around:
- hidden commissions
- inflated interest rates
- poor disclosure
- excessive commissions
- weak affordability checks
- unclear finance structures
- PCP mis-selling
- mis-sold car finance
Not every agreement automatically qualifies.
Each case still depends on:
- how the agreement was arranged
- what consumers were told
- how commission operated
- whether unfair relationships existed
Are PCP claim scams becoming more common?
Yes.
As awareness of the car finance scandal has increased, so has scam activity and misleading advertising.
PCP claim scams often involve:
- guaranteed payout promises
- hidden fees
- aggressive marketing
- fake urgency
- unclear contracts
The FCA has consistently reminded consumers that:
- compensation is not guaranteed
- not all agreements qualify
- consumers can complain on their own behalf
Just make sure to check any company you’re entering into an agreement with for FCA and SRA authorisation beforehand.
Can I claim if my car was repossessed?
Possibly.
The issue is not how the agreement was agreed but whether it was sold unfairly.
Complaints can still be made in repossession, arrears and voluntary termination cases where undisclosed commissions or other unfair financial arrangements increased the cost of the credit.
What if my complaint is unsuccessful?
If your lender has rejected your complaint, you may still be able to refer it to the Financial Ombudsman Service.
The Ombudsman is independent and can determine whether the lender treated you fairly in how they handled the complaint.
Consumers should note there are usually time limits to escalate complaints and that they should keep copies of all correspondence.
What is the difference between PCP claims and general car finance claims?
PCP claims refer to Personal Contract Purchase claims.
Car finance claims is a broad term that encompasses:
- PCP agreements
- Hire Purchase agreements
- and other regulated vehicle finance products.
Both may fall under the FCA redress scheme depending on how the agreement was set up.
What are the most common signs of mis-sold PCP?
The most common warning signs include:
- commission was not explained
- the APR appeared unusually high
- affordability checks were weak
- only one lender was offered
- finance terms were unclear
- balloon payments were poorly explained
- add ons appeared unexpectedly
- consumers felt pressured during the sale
Are PCP claims real?
Yes.
In March 2026, the FCA formally established its compensation scheme in the wake of many complaints, investigations and court judgements related to the wider car finance scandal that's been going on for years.
However, not all PCP agreements automatically qualify.
It still comes down to the facts of each agreement.
Frequently asked questions at a glance
- What are PCP claims? → Complaints linked to potentially unfair PCP finance agreements between 2007 and 2024
- What is a mis-sold PCP claim? → A claim that you have been sold PCP finance under unfair or misleading circumstances
- What is PCP mis-selling? → Unfair conduct during the sale of PCP finance
- What is a PCP claims check? → An eligibility review for possible compensation
- What is a car finance refund check? → A check to see if you could be owed a refund
- Can I still claim if the agreement ended? → Yes, lots of old agreements are still valid
- Can I claim without paperwork? → Yes, many agreements can still be traced
- What are Scheme 1 and Scheme 2? - The FCA’s two implementation phases for newer and older agreements
- Are PCP claim scams increasing? → Yes, consumers should check FCA regulation carefully
- Do I need a PCP claims company? → No, but many consumers choose professional support
- What is average compensation? → FCA estimates are now hovering at £829 per eligible agreement
Final thoughts
A lot has changed since we last updated this guide on October 2025 around PCP claims.
Uncertainty over complaints and court judgements has transformed into an official UK-wide compensation scheme for millions of car owners.
Customers with PCP agreements from 2007 to 2024 are now assessing if hiddden commissions, high-interest rates or unfair practices inflated the cost of their finance.
Whether you pursue a car finance claim yourself or use a PCP claims company, the most important step is understanding your agreement clearly and protecting yourself from PCP claim scams.
For many motorists, a simple PCP claims check or car finance refund check is now the starting point for understanding whether compensation may potentially be available.
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References:
- The Financial Conduct Authority formally confirmed its nationwide motor finance redress scheme on 30 March 2026 - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
- The FCA later concluded these arrangements created conflicts of interest and banned them on new agreements from January 2021 onwards - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models
- around 12.1 million agreements could potentially fall within scope - https://www.fca.org.uk/publication/policy/ps26-3.pdf
- average redress may sit around £829 per eligible agreement - https://www.bbc.com/news/live/czx94evl5lrt