Free Guide – PCP Claims

About this guide

If you bought a car, van or motorbike using Personal Contract Purchase (PCP) or another eligible type of motor finance, you could be entitled to compensation under the Financial Conduct Authority’s (FCA) motor finance consumer redress scheme.

In January 2021, the FCA banned discretionary commission arrangements (DCAs). Before then, some lenders allowed brokers and dealers to influence the interest rate customers paid, increasing the commission they earned. The FCA concluded that these arrangements created incentives that could result in consumers paying more than they should have.

In January 2024, the FCA launched a review into motor finance commission arrangements.

Following decisions by the Court of Appeal and the subsequent Supreme Court judgment, the legal position on motor finance commission complaints has been clarified. While many consumers may still be eligible for compensation, not every failure to disclose commission will automatically result in a payment.

The FCA has now confirmed an industry-wide consumer redress scheme for eligible customers.

What does this mean?

According to the FCA:

• Around 12.1 million motor finance agreements could fall within the scope of the scheme.
• Average compensation is estimated at around £830 per eligible agreement, although individual payments will vary.
• Total compensation is expected to be around £9 billion.
• Lenders are expected to identify eligible customers and contact them directly as the scheme is rolled out.

This is a significant step forward for consumers who may have paid more than they should have because of the way commission was arranged on their finance agreement.

How the redress scheme works

Unlike previous complaints processes, the FCA’s consumer redress scheme is designed so that eligible customers should not normally need to make a complaint first.

Instead, finance providers are expected to:

• Review agreements that fall within the scope of the scheme.
• Identify customers who may be eligible.
• Contact those customers directly.
• Explain whether compensation is due and how it will be paid.

If you’ve already made a complaint, your lender should review it as part of the scheme.

If you haven’t been contacted but believe your agreement may be eligible, you can still contact your lender directly.

This guide explains how to understand whether your agreement may be covered and what to do next.

Please note: Resolver provides free information to help consumers understand the process. This guide does not constitute legal advice.

Step 1: Check whether you could be affected

If you’ve ever financed a car, van, campervan or motorbike, it’s worth checking whether your agreement could be covered.

The FCA expects many regulated motor finance agreements entered into between 6 April 2007 and 1 November 2024 to fall within the scope of the redress scheme, subject to its eligibility criteria.

You may be eligible if commission on your finance agreement wasn’t properly disclosed and this resulted in you paying more than you otherwise would have.

The FCA estimates average compensation at around £830 per eligible agreement, although every case will be assessed individually.

You may have been affected if:

• You still have a finance agreement.
• Your agreement has ended.
• Your agreement was taken out between 6 April 2007 and 1 November 2024.
• The vehicle was financed primarily for personal use.

Other factors to consider

A note on older agreements:

Agreements from April 2007 onwards are now expected to fall within scope of the FCA scheme.

If you had an older agreement, you should still proceed with your claim to avoid your complaint being excluded by any time limits.

Can I reclaim for a vehicle I used for work?

The rules stipulate that a vehicle had to be for primarily personal, not business, use. While commuting comes within personal use, using it more than occasionally for business, or paying the expenses through your business, will mean that you don’t qualify for compensation.

(Some vehicles that were financed through a business agreement could be included – but only if they’ve been used for primarily non-business reasons and financed through a regulated credit agreement for under £25,000. This cap only applies to business agreements – not personal finance agreements).

Can I reclaim on behalf of a deceased relative?

You can make a claim on behalf of someone who has passed away. However, the lender will probably need you to provide a copy of the will and/or grant of probate in order to ensure that any compensation gets paid out to the right person.

Does this include vehicles that have been paid off?

Yes – even if the loan has been paid off, and the agreement is over, you may still be eligible to reclaim.

Does it include Personal Contract Hire?

No. This is leasing a car and is not included in the FCA investigation. If you had this type of finance agreement, this guide isn’t for you.

What if I had interest-free finance?

No. If you had a 0% interest deal there could not have been any ‘discretionary commission arrangement’ between the lender and the broker.

Is it possible to have multiple claims?

Yes. If you had multiple eligible car finance deals, you may be due multiple payouts. Each case is individual. If you want to make a claim yourself – rather than using a third party – you will need to make a separate claim for each firm/finance provider you had an agreement with.

Step 2: Gather your information

Although lenders are expected to contact eligible customers directly, it’s useful to have details of your agreement available.

If possible, gather:

• The lender’s name.
• Vehicle registration.
• Approximate finance dates.
• Finance agreement number.
• Any finance paperwork you still have.

What if I don’t know the details of my agreement?

If you can’t find the paperwork relating to your original agreement, you should check your credit report. If your agreement has been active in the past six years, it should be listed on there. You could also check any old bank statements if you have them.

Once you’ve found the firm’s name, even if you don’t know the finance agreement details, you should give them a call and request that they provide you with the full information.

Step 3: Contact your lender (if necessary)

Most eligible customers should not need to submit a complaint before being considered under the FCA’s scheme.

However, if you believe your agreement may be eligible and you haven’t heard from your lender, you can contact them directly and ask whether your agreement is being reviewed.

Provide as much information as possible to help them locate your finance agreement.

Letter template

Step 4: Wait for a response

Once your lender has reviewed your agreement, they should explain:

• Whether your agreement falls within the FCA’s scheme.
• Whether compensation is due.
• What happens next.

Given the scale of the scheme, responses may take time.

If your lender asks for additional information, reply promptly to help avoid unnecessary delays.

If you’re unhappy with how your lender handles your case, you may still be able to refer the matter to the Financial Ombudsman Service.

Frequently asked questions

I’ve already complained. Do I need to do anything else?

Usually not. Your lender should review your complaint under the FCA’s consumer redress scheme and contact you when they’ve completed their assessment.

I haven’t heard anything. What should I do?

Lenders are expected to contact eligible customers as the scheme is implemented. If you believe your agreement may be covered but haven’t been contacted after a reasonable period, contact your lender directly.

Will everyone receive compensation?

No. Each agreement will be assessed individually. Not every agreement involving commission will qualify for compensation.

• The level of commission
• Whether it was disclosed
• Whether it made the agreement unfair

In many cases, compensation is expected to reflect the difference between what you paid and what you should have paid without the commission.

The bigger the financing agreement, the more you may be due back.

How much compensation could I receive?

The FCA estimates average compensation could be around £830 per eligible agreement, although the amount paid will depend on your individual circumstances.

Compensation may take into account:

• Whether commission was properly disclosed.
• Whether the commission arrangement caused you to pay more.
• The amount of commission involved.
• The terms of your finance agreement.

If you’ve had multiple eligible finance agreements, you may receive compensation for more than one agreement.

There is no fixed amount payable under the scheme. Every case will be assessed individually by the lender using the FCA’s rules.

The FCA expects most eligible customers to be contacted directly by their lender.

However, if you’d like help understanding your options or navigating the process, you may choose to seek independent support. If you decide to use a third-party claims service or legal representative, make sure you understand any fees or charges before signing up.