Updated: 19 June 2026

Originally Published: 04 November 2024

PCP claims have become one of the most talked about consumer finance issues in the UK.

Following years of investigation into car finance mis-selling, the Financial Conduct Authority announced a nationwide motor finance redress scheme in March 2026 [1] that could affect millions of agreements signed between 6 April 2007 and 1 November 2024.

As a result, many motorists are now asking whether they may have been affected by mis-sold PCP car finance and whether they could be entitled to compensation.

The FCA estimates that around 12.1 million motor finance agreements could potentially fall within the scope of its review [2], with compensation across the industry potentially reaching billions of pounds.

If you entered a Personal Contract Purchase (PCP) agreement during this time, it’s worth reading on to find out how PCP finance claims work, what makes a PCP agreement potentially unfair, and how to find out if your car finance agreement may be eligible for further review.

This guide covers what PCP claims are, who could be eligible, how the FCA car finance redress scheme might impact motorists and what to know about car finance compensation, timescales, and how to spot PCP claim scams.

What are PCP claims?

PCP claims are complaints or compensation claims relating to Personal Contract Purchase agreements that may have been sold unfairly.

A PCP claim often relates to important information that may not have been fully explained before the customer signed up to the finance deal. This could relate to commissions, lender ties, the true cost of borrowing or other significant elements of the deal that might have affected the consumer’s decision to proceed.

Over recent years, concerns have increased over how some motor finance products have been sold. This has resulted in an upsurge in PCP claims as well as car finance claims in general throughout the UK.

The FCA’s motor finance review highlighted a number of areas where consumers are not always given information to make fully informed decisions. As a result, millions of motorists are now reviewing historic agreements to determine whether they may have been affected by car finance mis-selling.

Most PCP claims today relate to agreements signed between 6 April 2007 and 1 November 2024, which is the period covered by the FCA's motor finance redress scheme.

Importantly, not every PCP agreement was mis-sold and not every motorist will qualify for compensation. However, consumers who believe important information was withheld, poorly explained, or presented unfairly may wish to investigate further.

What is PCP car finance?

Personal Contract Purchase, most commonly referred to as PCP car finance, is one of the most popular forms of car finance in the UK. Unlike a traditional loan, PCP car finance splits the cost of the vehicle into a number of parts. Consumers will generally pay an initial deposit, fixed monthly repayments, and an optional final payment (often known as a balloon payment). At the end of the agreement, consumers are generally given three options, which include returning the vehicle, paying the final balloon payment and keeping the vehicle or using any available equity towards another vehicle.

The monthly payments on PCP car finance are usually lower than other types of borrowing, which is why it is so popular among motorists.

However, PCP can also have hidden pitfalls which are not initially obvious.

Balloon payments, mileage limits, excess wear and tear charges, refinancing options and commissions can all be over complicated or not fully understood when an agreement is signed.

This is one of the main reasons why mis-sold PCP car finance has become such a big issue in recent years.

Why are PCP claims receiving so much attention in 2026?

The conversation around PCP claims changed dramatically following a series of regulatory investigations, court decisions, and FCA announcements.

In March 2026, the FCA formally launched a nationwide motor finance redress scheme, covering many agreements entered into between 2007 and 2024.

The regulator expects that up to 12.1 million agreements may be in scope and up to 75% of affected consumers will ultimately receive compensation.

The FCA has also estimated that compensation across the industry could reach approximately £7.5 billion.

At the same time, legal challenges brought by Consumer Voice, Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole Auto Bank have created uncertainty [3] around implementation and delayed expectations for payouts 2026.

As a result, consumers are increasingly reviewing historic agreements to understand whether they may have a valid PCP claim or car finance claim.

For many motorists, this is the first time they have considered how their agreement was structured and whether important details were explained properly before they signed.

What counts as mis-sold PCP car finance?

Mis sold PCP claims can occur in a number of ways.

The FCA review into the motor finance market discovered three key areas of concern that are now at the heart of many PCP claims and car finance claims.

Discretionary commission arrangements

Discretionary Commission Arrangements (DCAs) allowed certain dealerships and brokers to 'mark-up' a customer’s interest rate in exchange for higher commission.

A large number of customers did not know commission could affect the price of borrowing.

The FCA banned DCAs in January 2021 [4]. However, pre-existing agreements are a key focus of ongoing investigations.

High or undisclosed commission

In some cases, consumers were advised that commission "may be paid" with no meaningful explanation given as to how commission works, or the impact it could have on the total cost of the agreement.

The FCA have concerns that consumers may not always have been given enough information to make an informed choice.

Limited choice of lender

In some cases, consumers may have been presented with just one finance option, without being made aware that there could be other lenders who may be able to offer finance.

If lender recommendations were made due to commercial relationships, as opposed to what was best for the consumer, it may be questionable as to whether the agreement was sold in a way that was fair to the consumer.

Poorly explained balloon payments

An important feature of PCP car finance is the final payment. There's nothing intrinsically unfair about balloon payments, but some consumers subsequently felt they did not appreciate the size of the final payment, or the options at the end of the contract.

Hidden charges and additional costs

Some drivers have raised concerns about mileage limits, excess mileage charges, administration fees, optional products, and other costs that were not clearly explained at the point of sale.

High pressure sales tactics

Consumers should have enough time to read a finance agreement before signing it.

If you were pressured into making a decision quickly or prevented from asking questions, it may be relevant when considering the circumstances in which the sale was made.

Am I eligible for a PCP claim?

Each case is different, but consumers have often felt they should look into their situation further if:

• the agreement was entered into on or after 6 April 2007 and before 1 November 2024
• the commission arrangements were not fully explained to them
• you were offered only one lender or finance product
• the cost of borrowing was not fully disclosed to them
• important contract terms were not clear to them
• key features of the agreement were not properly explained to them
• they were under pressure to sign the agreement

Not every PCP agreement will qualify for compensation.

However, if you believe important information was withheld or poorly explained, it may be worth carrying out a PCP claims check or car finance refund check.

Common examples of mis sold PCP claims

Although every agreement is different, certain themes appear repeatedly across mis sold PCP claims.

Commission not properly disclosed

One of the most common complaints is that consumers were unaware the dealership could earn commission from arranging finance.

Drivers were shown just one finance option

Some drivers later found out that they had not been shown any other lenders or competitive finance options.

Monthly payments discussed, not overall cost

Customers said there was too much emphasis on what they could afford and too little on how much they had to repay.

Loan to end not understood

The balloon payment was only understood by some towards the end of the term.

Optional products added without clear explanation

Products such as GAP insurance, warranties, or maintenance packages should be explained separately and clearly.

How to check if you may have a PCP claim

Many consumers are unsure where to begin.

The good news is that investigating a potential PCP claim is often easier than people expect.

The first step is understanding whether your agreement falls within the FCA review period.

You may be able to identify this by reviewing:

• your finance agreement
• lender correspondence
• bank statements
• vehicle purchase paperwork
• credit reports

However, many motorists no longer have access to these records.

As a result, many consumers now start with a PCP claims check or car finance refund check.

Many claims management companies and finance claims experts offer free online tools that can help identify historic agreements and determine whether further review may be worthwhile.

These checks often require only basic information such as:

• name
• date of birth
• address history
• contact details

Some providers can then use credit reference data and vehicle registration records to trace agreements that consumers may have forgotten about.

What if I can’t find my old finance agreement?

Many consumers exploring PCP claims no longer have their original agreements.

This is particularly the case when the agreements were signed many years ago, or if the car has already been sold.

Consumers searching for old car finance agreement online free often begin their search by looking at credit reports from providers like Equifax, old emails or historic bank statements.

Some claims management companies and finance claims experts can also help trace historic agreements through car finance refund check services and PCP claims check tools.

Missing paperwork may make the process more difficult, but it does not necessarily prevent a claim from being explored.

How much compensation could be available?

A very common question from consumers is how much compensation they could get for mis-sold car finance.

According to the FCA they currently estimate the average to be around £829 per eligible agreement [5], however, in actuality, this could be a lot more or a lot less.

Compensation may depend on factors such as:

• loan amount
• agreement length
• interest charged
• commission arrangements
• lender practices
• individual circumstances

Potential outcomes may include:

• car finance compensation
• car finance refund payments
• PCP refund payments
• refunds of excess interest
• commission related redress

This is why two consumers with similar vehicles may ultimately receive very different outcomes.

When will PCP compensation be paid?

This is one of the most common questions in 2026.

When the FCA announced its redress scheme in March 2026, many consumers expected compensation payments to begin later that year.

However, legal challenges have changed expectations significantly.

The FCA has confirmed that the legal challenges are unlikely to be heard before October 2026 [6].

As a result, compensation payments are now increasingly expected to begin during 2027 rather than 2026.

The FCA keeps backing the scheme, and says it is the fastest and fairest way to pay out to consumers.

The big problem is that nothing is certain until the legal process is clearer.

This means that consumers should be wary of anyone who is promising a guaranteed payout in 2026.

How to avoid PCP claim scams

Growing awareness of the car finance scandal has led to an increase in marketing activity across the claims sector.

Consumers should be cautious of organisations that:

• guarantee compensation
• pressure them to sign immediately
• refuse to explain fees clearly
• claim special access to FCA decisions
• request upfront payments

Before working with any representative, check whether they are appropriately regulated.

Claims management companies should be authorised by the FCA [7], while solicitors should be regulated by the Solicitors Regulation Authority [8].

Consumers should also avoid signing agreements with multiple representatives, as this can potentially result in duplicate fees.

Frequently asked questions

What are PCP claims?

PCP claims are complaints or claims for compensation relating to a Personal Contract Purchase agreement that you believe may have been sold to you unfairly or without proper disclosure.

How do I use a PCP claims check?

Simply complete a PCP claims check on a claims management company or finance claims expert website. This will usually take a couple of minutes and only ask for basic information such as name, date of birth, previous addresses and contact details. These details are used to establish whether your agreement could potentially be within the FCA car finance review window and if you are eligible for a full compliance check.

Can I submit a PCP claim without documentation?

Yes. Credit reports, lender records and PCP claims check services can often be used to identify historic agreements.

What's the difference between a PCP claims check and a car finance refund check?

A PCP claims check is specifically designed to only look at Personal Contract Purchase agreements. A car finance refund check may cover a wider range of vehicle finance products, including PCP and Hire Purchase.

Will making a PCP claim impact my credit score?

No. Making a complaint or investigating a potential claim will not impact your credit score.

Are we likely to see payouts in 2026?

It is important to be aware that current expectations have been significantly revised following legal challenges to the FCA redress scheme. As a result, compensation payments 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 to their lender free of charge.

Final thoughts

PCP claims have rapidly accelerated from a specialised consumer issue to the UK’s biggest ever financial redress debate.

Urged on by the FCA and a general awakening to the nature of commission structures and selling practices, millions of motorists are now reviewing agreements that they may well have entered into many years ago.

Not every PCP agreement was mis-sold and not every consumer will qualify for compensation. However, understanding how PCP car finance works and recognising potential warning signs can help motorists make informed decisions about their options.

For many, a PCP claims check or car finance refund check is the easiest place to start. It can help determine if an agreement is likely to fall in the FCA review period and if it would be worth investigating further.

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References:

1. the Financial Conduct Authority announced a nationwide motor finance redress scheme in March 2026 - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
2. The FCA estimates that around 12.1 million motor finance agreements could potentially fall within the scope of its review - https://www.fca.org.uk/publication/policy/ps26-3.pdf
3. legal challenges brought by Consumer Voice, Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole Auto Bank have created uncertainty - https://consumervoice.uk/cars/fca-car-finance-compensation-challenge/
4. The FCA banned DCAs in January 2021 - https://www.fca.org.uk/news/press-releases/fca-ban-motor-finance-discretionary-commission-models
5. According to the FCA they currently estimate the average to be around £829 per eligible agreement - https://www.bbc.com/news/live/czx94evl5lrt
6. The FCA has confirmed that the 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
7. Claims management companies should be authorised by the FCA - https://www.fca.org.uk/firms/claims-management
8. solicitors should be regulated by the Solicitors Regulation Authority - https://www.sra.org.uk/consumers/register/