When many drivers took out a PCP agreement, the focus felt straightforward.

Can I afford the monthly payment?

That question makes sense. Monthly affordability is usually the headline figure in the showroom, and it is often presented as the main decision point.

But as the car finance scandal has unfolded, more drivers are realising something important. The monthly payment rarely tells the full story. In many cases, it hides deeper structural issues linked to mis-sold car finance and wider car finance mis-selling.

This guide looks at common PCP agreement red flags that sit beyond the monthly figure. It explains why they matter, even years later, and how mis-sold car finance check can become relevant if you are considering a PCP claim or a broader car finance claim.

Why low monthly payments can be misleading

PCP agreements are designed to keep monthly payments looking manageable. That is part of their appeal, and it is often how the product is sold.

A low monthly figure can feel reassuring. It can also narrow your focus.

What it often does not show clearly is:

• how much interest you will pay overall
• how the agreement is structured at the end
• what happens if you want to settle early
• whether extra products were rolled into the finance

When attention stays on affordability alone, important details can be missed. This is why many PCP mis-selling claims begin with the same realisation.

“I could afford the payments. I just did not understand the agreement.”

Interest rate discretion and lack of explanation

One of the most common car finance warning signs involves the interest rate.

Many drivers recall being told the rate was standard, fixed, or simply the best available. What was often missing was a clear explanation of how that rate had been set, or whether it could vary.

In some cases, lenders and brokers used Discretionary Commission Arrangements (DCAs). Under these arrangements, the interest rate could be increased within a range, which in turn increased commission.

The concern is not just the rate itself. It is whether you were told:

• how the rate was decided
• whether lower rates were available
• whether the salesperson had discretion over it
• how it affected the total amount payable

If the interest rate was presented as a given, without explanation, that lack of transparency can matter in a car finance claim.

Commission linked to interest rate changes

Commission sits at the centre of many discussions around mis-sold car finance.

The FCA has raised concerns about situations where commission was linked to interest rates, and where customers were not clearly told about that link [1]. In some cases, higher interest meant higher commission for the broker.

Red flags here often include:

• commission not being mentioned at all
• vague answers when finance was discussed
• reassurance that the deal was “standard”
• no explanation of how finance options were compared

The FCA has also highlighted cases involving unfairly high commission, where the broker’s fee may have been far higher than a customer would reasonably expect.

You do not need to prove commission was paid to raise concerns. But if it was not disclosed properly, it can support PCP claims and wider car finance claims.

Being shown only one lender without clarity

Another practice identified by the FCA involves contractually tied arrangements [2].

Drivers thought they were being presented with choice of finance options, when in fact there was only one lender. That matters because buyers need choice and the ability to compare options.

Warning signs include:

• being told the finance was “the only option”
• no discussion of alternative lenders
• no explanation of why that lender was selected
• pressure to proceed without comparison

If you thought the market had been checked when it had not, that lack of transparency can be relevant to car finance refund check and car finance mis-selling concerns.

Vague or missing disclosures at the point of sale

A fair PCP agreement relies on clear disclosure, not assumptions.

Drivers often say they were not clearly told about:

• the total amount payable
• the size of the final balloon payment
• mileage limits and condition rules
• early settlement charges
• what happens if you return the car
• what happens if you keep it

Instead, the conversation stayed focused on the monthly payment.

Vague explanations, rushed summaries, or being told not to worry about the paperwork are all PCP agreement red flags. These gaps matter because they affect whether you could make an informed decision at the time.

Pressure to sign quickly

Pressure does not always feel obvious at the time. It often shows up quietly, sitting behind an attractive monthly payment and a sense that everything needs to move fast.

Many drivers later recall being told things like:

• the deal was only available that day
• approval needed to be confirmed straight away
• the car would be gone if they waited
• signing was just a formality

On its own, pressure does not automatically mean mis-selling. But it does matter when it leaves you with little time to read the agreement, ask questions, or compare options properly.

If the pace of the sale replaced clear explanation, that context can be relevant when considering a PCP claim.

Add-ons bundled into the finance

Many drivers only discover later that extras were included in their PCP agreement.

Common examples include:

• GAP insurance
• service plans
• warranties
• paint or fabric protection
• tyre or alloy cover

The issue is not always the add-on itself. The issue is whether:

• it was clearly optional
• the cost was explained properly
• it was added without clear consent
• it increased the loan and interest

When add-ons are bundled into finance, they increase the amount borrowed and the interest paid. This is a common PCP hidden issue that only becomes clear after the sale.

Why these red flags still matter after the sale

Many drivers assume it is too late to raise concerns once the agreement has started, ended, or been settled.

That is not always the case.

Most car finance claims focus on conduct at the point of sale. They look at:

• what you were told
• what you understood
• what was unclear or missing
• whether the process was fair

You are not expected to spot everything at the time. In fact, many warning signs only become obvious later, once you see how the agreement works in practice.

That is why these red flags still matter.

If you do raise a complaint and it is rejected, this guide explains what happens next:

What Happens When Your PCP Claim Gets Rejected? Next Steps for UK Drivers

Reviewing your PCP agreement now

If you are reviewing an old or current agreement, try to look beyond the monthly payment.

Ask yourself:

• Did I understand how the interest rate was set?
• Was commission explained to me?
• Did I know the total amount payable?
• Did I understand the balloon payment?
• Were add-ons included, and did I agree to them?
• Did I feel rushed to sign?

You do not need every answer to be no. One or two concerns can be enough to justify a closer look.

Some drivers consider using template letters at this stage. They can help, but they also carry risks. This guide explains what to watch out for: Are PCP Template Letters Safe to Use? What Drivers Need to Know

Staying alert to scams while exploring claims

As awareness of the car finance scandal has grown, so has the risk of scams. Not every message or call offering help is genuine.

If you are exploring PCP claims or car finance claims, it helps to know the warning signs before you engage with anyone. This guide sets them out clearly: How to Spot PCP Claim Scams in 2026

A final reminder for drivers

A low monthly payment isn't necessarily a fair agreement.

PCP deals are deliberately complicated. And that complexity may hide interest decisions, commissions, bundled costs, and limits on choice that become apparent only later on.

Whatever makes something in your agreement seem unclear in hindsight, pay attention to that feeling. Car finance mis-selling is rarely about a single number. The question is whether the structure and explanation were fair then.

Looking beyond the monthly payment is often the first step to understanding whether you have grounds for a PCP claim or a wider car finance claim.

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References:

1. The FCA has raised concerns about situations where commission was linked to interest rates, and where customers were not clearly told about that link - https://www.fca.org.uk/publication/consultation/cp19-28.pdf
2. Another practice identified by the FCA involves contractually tied arrangements - https://www.fca.org.uk/publications/consultation-papers/cp25-27-motor-finance-consumer-redress-scheme