Updated: 16 March 2026

Originally Published: 26 May 2025

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Personal Contract Purchase, or PCP finance as it is more commonly known, is one of the UK’s most popular ways to fund a car [1]. Millions of drivers have used PCP agreements over the last decade because they offer flexible end-of-term options and lower monthly repayments than many traditional car finance loans.

For many people, PCP does exactly what it promises. It offers access to newer cars with manageable monthly payments. It also gives drivers choices at the end of the contract, which can feel reassuring when you do not want to commit to owning the vehicle outright from day one.

As the motor finance market has expanded, concerns have grown that not every deal was always set up in a fair or transparent way. Some borrowers are now realising that key aspects of their finance agreements were not clearly explained when they signed the paperwork. That confusion often shows up later, when the agreement ends, when a driver tries to change cars, or when they compare the total cost of the agreement to what they originally believed they were signing up for.

Concerns commonly relate to commission structures between lenders and dealers, the transparency of finance pricing, and whether customers were given enough information to understand the long-term cost of their agreement. In many cases, drivers say they were focused on the monthly payment, but they were not helped to understand the bigger financial picture.

This growing awareness has led to a noticeable rise in PCP claims across the UK. Drivers who suspect their agreement may have involved PCP mis-selling are reviewing their contracts to understand whether they were treated fairly.

If a finance agreement was arranged unfairly or important costs were not explained properly, it may be possible to pursue a mis-sold PCP claim and potentially recover car finance compensation or a car finance refund.

This guide explains everything you need to know about PCP finance claims, including how PCP agreements work, how to spot the signs of mis-sold car finance, how to check car finance claim eligibility using your paperwork, and what happens when you make a complaint.

Eligibility window: Which agreements may be in scope?

Many people researching PCP claims want to know whether their agreement falls within the period currently being examined across the motor finance market.

The agreements most commonly referenced in ongoing regulatory investigations cover deals arranged from 6 April 2007 to 1 November 2024 [2].

If you took out a PCP agreement or another regulated motor finance product during this time, it may be worth reviewing the paperwork and completing a car finance refund check.

Doing this can help you understand whether your agreement may show signs of PCP mis-selling or broader car finance claims concerns.

If you want a deeper explanation of eligibility criteria, see this guide.

What is a PCP claim?

A PCP claim is where a borrower believes their Personal Contract Purchase agreement may have been mis-sold.

In practical terms, people often explore a claim when they feel they were not given enough information to make a properly informed decision before signing the finance agreement.

That lack of clarity may not always be obvious at the time. Many drivers only begin questioning the agreement months or years later when they review the paperwork or reach the end of the contract.

PCP mis-selling claims usually relate to whether important aspects of the agreement were clearly explained during the sales process, including:

• what interest rate you were being charged
• how much you would repay in total
• how big the balloon payment was at the end and what it was for
• whether dealer or broker commission influenced the price

If you believe your agreement was arranged unfairly, you can raise a car finance claim with the lender explaining why you think the finance may have been mis-sold.

If the complaint is upheld, the borrower may receive car finance compensation. This may involve refunds of excess interest, adjustments to the agreement, or another form of car finance refund.

Many drivers begin by reviewing their documents and completing a car finance refund check to determine whether their agreement may show signs of PCP mis-selling.

Key takeaways about PCP claims

For readers who want a quick overview, the following points summarise the key facts about PCP claims.

• PCP claims are complaints raised when borrowers believe their Personal Contract Purchase agreement may have been mis-sold.
• PCP mis-selling can occur when important costs or terms were not clearly explained during the sales process.
• Borrowers can review their finance agreement to determine whether they may have grounds for a car finance claim.
• Many consumers start by completing a car finance refund check to identify potential warning signs.
• If a complaint is upheld, the borrower may receive car finance compensation or a car finance refund.

Understanding these points helps drivers decide whether it is worth investigating PCP finance claims further.

Why PCP claims are increasing

The number of PCP finance claims has increased significantly in recent years.

One reason is the widespread use of PCP agreements across the UK. Millions of vehicles were financed through PCP arrangements during the past decade.

Another factor is growing awareness of consumer rights. Borrowers who previously assumed their agreement was standard are now reviewing the terms more carefully.

Regulatory scrutiny of the motor finance industry has also encouraged drivers to examine whether their agreements were transparent and fair.

For more context on why these complaints have become more common, see this blog.

Types of unfairness in PCP claims

Many PCP claims are assessed using the idea of an unfair relationship between borrower and lender.

In simple terms, investigators ask whether the customer was treated fairly and whether the agreement was presented in a transparent way.

Investigations into mis-sold car finance often examine several types of potential unfairness.

Undisclosed commission

Dealers sometimes receive commission from lenders for arranging finance agreements. If borrowers were not clearly informed about this commission or how it could influence pricing, they may not have understood how the interest rate was determined.

High or poorly explained commission

Even where commission is mentioned in the contract, the explanation may be extremely limited. If the borrower did not receive a clear explanation of how commission influenced the finance price, this lack of transparency may contribute to a mis-sold PCP claim.

Limited lender choice

Some dealerships present finance options as though they are comparing multiple lenders. If the borrower believed a wider search had been conducted when only a single lender was considered, they may not have been given a genuine opportunity to compare alternatives.

Poor explanation of key terms

Important details such as balloon payments, mileage limits, and end-of-agreement charges should be explained clearly during the sales process. Failure to explain these features properly may contribute to PCP mis-selling concerns.

More information about hidden PCP costs can be found here.

For a deeper look at the broader risks associated with these agreements, see this blog.

Guidance on identifying warning signs about mis-sold PCP deals can also be found in this post.

Legal grounds for PCP finance claims

Many PCP finance claims rely on consumer protection rules and lending standards.

UK consumer credit law requires lenders to treat customers fairly and provide clear information about financial products [3]. That includes presenting costs in a way that an ordinary customer can understand, and avoiding sales practices that obscure the real price of the agreement.

If you were provided with incorrect information or some facts were left out, it could be a part of your mis-sold PCP complaint.

For a more in-depth understanding of the legal basis for these complaints please visit this guide.

Regulatory update: Motor finance compensation scheme developments in 2026

The Financial Conduct Authority continues to review widespread concerns surrounding car finance claims, particularly where commission arrangements may have influenced the cost of borrowing.

The regulator has indicated that it is considering the introduction of an industry-wide compensation scheme for customers who were treated unfairly.

If the scheme proceeds, the FCA expects to publish its final rules in late March 2026 [4].

Because of the scale of the issue and the number of agreements involved, the FCA has indicated that the scheme would likely include an implementation period to allow lenders time to prepare.

Current proposals recommend:

• an implementation period of around 3 months
• up to 5 months for older agreements

During this time lenders would prepare their systems to review affected agreements and calculate potential redress.

One important change being considered is that consumers who complain before the scheme starts would not need to opt out. Instead, their lender would review the complaint as part of the scheme process.

Within three months after the implementation period ends, lenders would inform affected customers whether they are owed compensation and how much that compensation may be.

The FCA has also suggested that consumers may be able to accept redress offers immediately, rather than waiting for a final determination.

Even with the implementation period in place, the FCA expects that millions of consumers could receive compensation during 2026 if the scheme goes ahead [5].

Regulatory update: complaint responses resume after 31 May 2026

While the wider compensation framework is still being considered, complaint handling timelines are also changing.

The FCA previously allowed firms additional time to review motor finance complaints while the regulatory position was being clarified.

From 31 May 2026, lenders must begin issuing final responses to affected car finance claims [6].

For complaints that are not covered by any future compensation scheme, firms will generally have up to eight weeks after this date to issue a final response.

This means many borrowers who have already submitted PCP claims may begin receiving formal decisions during 2026.

More details about claim timelines and context can be found here.

Do I qualify for PCP claims? A quick checklist

If you are unsure whether PCP claims apply to you, start with a quick reality check. This section is not a decision on your case. It is a practical way to spot the most common signs linked to PCP mis-selling and mis-sold car finance.

You may be a good candidate for a PCP claim or PCP finance claims review if several of the points below feel familiar.

Eligibility basics

• You took out your agreement on or after 6 April 2007 and before 1 November 2024.
• The agreement was a PCP, or another regulated motor finance product that raises similar concerns.
• You can access at least some paperwork, or you are willing to request it from the lender.

Sale and disclosure signals

• You were not clearly told how the interest rate was set, or why it was at that level.
• You were not shown the total cost of borrowing in a way that was easy to understand.
• You were not told that commission might be paid, or you were told in vague terms that did not explain how it could affect the price.
• The sales conversation focused heavily on the monthly payment, with limited explanation of how the overall deal worked.

PCP-specific red flags

• The balloon payment was not explained properly, or you only realised how large it was later.
• You did not understand mileage limits, excess mileage charges or wear-and-tear standards until the end of the agreement.
• The end-of-agreement options were not explained in a balanced way, so you did not understand the true cost of keeping the car.

Pressure and affordability signs

• You felt rushed into signing, or you were told the offer would disappear if you did not act quickly.
• They didn't ask many questions about affordability. Or, they approved you with no reasonable review of your ability to pay.
• You eventually fell behind. Or, you had to re-finance, roll over or modify the agreement.

Outcome triggers

• You later compared your APR to other offers and felt it was high for your credit profile without a clear explanation.
• You suspect the finance product was not the best match for your needs, but alternatives were not properly discussed.

If you recognise several of these points, the next step is usually a car finance refund check and a structured review of your paperwork. That is a practical way to understand how to check car finance claim eligibility without guessing.

How to check car finance claim eligibility in 5 minutes

Use this fast track method when you need a quick initial starting point for car finance claims. This is not a replacement for a full review. It will allow you to identify if your agreement is worth looking into as a mis-sold PCP claim.

Step 1: Confirm the timeframe

Check the agreement start date is between 6 April 2007 and 1 November 2024. This means it falls within the most frequently cited review period for PCP claims.

Step 2: Find the key numbers

Locate these figures in your agreement or pre-contract documents:

• The APR or interest rate
• The amount of credit provided
• The total amount you are expected to repay
• Your agreed monthly payment
• The balloon payment, if the agreement is a PCP deal

If any of these figures were not explained clearly at sale, note that down. It can be relevant to PCP mis-selling.

Step 3: Scan for commission wording

Look for phrases such as:

• “Commission may be paid”
• “We may receive commission”
• “The dealer may receive payment”

If commission is mentioned but not explained in a meaningful way, it may still support PCP finance claims concerns because the wording often does not tell you whether commission affected the price.

Step 4: Check the PCP extras that drive complaints

If your agreement is PCP, confirm you understand:

• mileage cap and excess mileage charges
• wear-and-tear standards
• what happens at the end of the agreement
• whether the balloon payment was realistic for you

Hidden or poorly explained costs are a common theme in mis-sold car finance.

More details on mileage caps can be found here.

Step 5: Compare what you were told to what you signed

Ask yourself one question: did the sales explanation match the written agreement?

If the monthly payment was emphasised, but the balloon payment, commission, or total repayable were not clearly explained, that can be a strong trigger for a PCP claim review.

At this point, you have effectively completed a basic car finance refund check. If the answers raise concerns, the next step is to gather paperwork and consider submitting a complaint as part of the wider car finance claim landscape.

If you want a full explanation of how PCP finance works so you can sense-check your agreement, see this guide.

If you want guidance on warning signs and how to protect yourself, see this post.

The PCP claims process

If you decide to pursue a car finance claim, the process usually involves several stages.

Step 1: Collect your paperwork

Collect your finance agreement, pre-contract documents, and payment history. If you no longer have them, you can request copies from your lender.

Step 2: Review the agreement for warning signs

Look for signs linked to PCP mis-selling and mis-sold car finance, including unclear cost explanations, commission wording, and unexpected end-of-agreement charges.

Step 3: Submit your complaint to the lender

Explain why you believe your finance may have been mis-sold. Keep it factual. Describe what you understood at the time and what you believe was missing or unclear.

Step 4: Wait for the lender’s final response

From 31 May 2026, firms must begin issuing final responses again for affected complaints. In many cases, firms will generally have up to eight weeks after that date to issue a final response where the complaint is not covered by a scheme.

Step 5: Escalate if needed

If you disagree with the outcome, you may be able to refer the complaint to the Financial Ombudsman Service for independent review.

How much could a car finance refund be?

One of the most common questions about PCP claims is how much compensation may be available.

The honest answer is that it depends on the agreement. There is no single amount that applies to every customer.

The loan amount, interest rate, length of the agreement, and the financial impact of any mis-sold car finance all affect what a fair outcome looks like.

This is not a replacement for a full review. Options could include:

• refund of overcharged interest
• reduction of the outstanding balance
• adjustment of the finance agreement
• partial refund of payments made
• full or partial refund of car finance

Many consumers begin with a car finance refund check to understand whether their agreement may qualify for compensation and what evidence may be needed.

Choosing the right PCP claims company

Some borrowers choose to pursue PCP finance claims independently, while others prefer professional assistance.

If you decide to work with a claims company, it is important to choose carefully. You should understand the fee structure, what support is included, and whether the firm is properly authorised.

Guidance on choosing a reputable PCP claims company can be found here.

Frequently Asked Questions about PCP claims

What are PCP claims?

PCP claims are complaints raised by borrowers who believe their Personal Contract Purchase agreement may have been mis-sold.

What does PCP mis-selling mean?

PCP mis-selling is when your finance agreement was sold to you in an inappropriate way. This may include unclear pricing, undisclosed commission payments, pressure selling, or insufficient explanation of the agreement.

How to check car finance claim eligibility?

Review your finance agreement and check the interest rate, balloon payment, and total repayable amount. Many drivers start with a car finance refund check to identify early warning signs.

Can I make a claim if my agreement has finished?

Yes. Many car finance claims involve agreements that have already been completed.

Does making a claim affect my credit score?

Submitting a complaint about mis-sold car finance does not usually affect your credit score.

How long does it take to get a response on PCP claims?

Timelines vary depending on the complaint, the lender, and whether you need to escalate the case for an independent review.

For more detailed answers, see our PCP claims FAQs blog.

Start your PCP claim

If you believe your agreement may have been mis-sold, start by reviewing your finance paperwork. Focus on whether you understood the agreement at the time and whether the paperwork supports what you were told.

If you want a simple first step, a car finance refund check can give you an initial view of whether your agreement may qualify for further assessment.

From there, you can decide whether you want to pursue a mis-sold PCP claim and seek car finance compensation if the complaint is upheld.

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References:

1. Personal Contract Purchase, or PCP finance as it is more commonly known, is one of the UK’s most popular ways to fund a car - https://www.fca.org.uk/publication/consultation/cp25-27-technical-annex-2.pdf
2. The agreements most commonly referenced in ongoing regulatory investigations cover deals arranged from 6 April 2007 to 1 November 2024 - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
3. UK consumer credit law requires lenders to treat customers fairly and provide clear information about financial products - https://www.legislation.gov.uk/ukpga/1974/39
4. the FCA expects to publish its final rules in late March 2026 - https://www.fca.org.uk/news/statements/motor-finance-compensation-scheme-include-implementation-period
5. the FCA expects that millions of consumers could receive compensation during 2026 if the scheme goes ahead - https://www.ft.com/content/31057adc-5b02-4778-82c5-f95ce2824918
6. From 31 May 2026, lenders must begin issuing final responses to affected car finance claims - https://www.fca.org.uk/news/statements/pause-motor-finance-complaints-handling-lift-31-may-2026