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Mis-sold PCP Car Finance Claims

The FCA has found that commission was paid on 95% of UK car finance PCP agreements. If you were not informed about this commission or the finance deal wasn’t right for you, you could be owed thousands in mis-sold car finance compensation. Find out if our panel of Mis-sold PCP Solicitors can help. 

If you have purchased your vehicle via a car finance deal, your lender is obliged to inform you of exactly what is involved in that deal. You must make an informed decision so that you know the finance deal is right for you. Car salesmen or women cannot act in their own interest.

If you were not informed thoroughly about your PCP agreement and the costs involved, you could be owed mis-sold PCP car finance compensation.

If you believe you have been mis-sold a finance deal and feel trapped, you may be owed thousands. Even if you haven’t lost money, if the car finance deal isn’t right for you and your financial situation you can potentially bring forward a claim for PCP mis-selling. If you used PCP or HP to finance a vehicle between 2007 - October 2019, you could be owed thousands. 

Start Your Mis-sold Car Finance Claim - Step 1/3

What Are Mis-Sold Car Finance (PCP) Claims?

You may have been a victim of mis-sold car finance if you have received negligent or poor advice in relation to your car finance options in the last six years, or if you were not made aware of any commission being charged within the agreement. The lender might have been misleading about the extra costs involved, or they may have charged you more interest than they should have.

Below, we explain exactly what is involved in bringing forward a mis-sold car finance (PCP) claim and how you can begin. If you have any questions that we haven’t answered, get in touch with the panel of mis-sold PCP lawyers.

Some motor dealers are overcharging unsuspecting customers over £1000 in interest charges in order to obtain bigger commission payouts for themselves. This is unacceptable. Jonathan Davidson, director of supervision for retail and authorisations at the FCA.


What are the most common types of Mis-Sold Car Finance Claims?

Some of the main reasons you may have been mis-sold your PCP car finance deal are:

Undisclosed or hidden commission

The FCA has reported that thousands of customers may have been completely unaware of any commission payments. If the car salesperson received a fee or commission for bringing the car finance deal to the bank, and the bank has not informed you of this, that is a hidden, secret, or undisclosed commission. The finance provider or bank must inform you of ALL of the fees within the transaction.

High-pressure sales tactics

If you were put under pressure to opt into a finance agreement that you didn’t feel was right for you, you may be able to claim compensation. The salesperson needs to give you enough time to assess the deal offered and potentially find an alternative option.

Lack of proper affordability checks

Many customers enter into loan agreements that are not suited to their financial situation. This leaves them trapped by the PCP deal, where they are not in a position to make payments throughout the whole term of the agreement.

Inflated prices and overcharges in interest

Many cases show that customers are overcharged thousands in interest in order for the dealership to obtain a higher commission pay-out.

Emissions Scandal Claims

There are currently many car manufacturers being investigated for tampering with their diesel emissions. Our panel believe that if you entered the PCP agreement on the basis that you were receiving a particular type of car with a particular set of emissions, then you have been misrepresented. If this is the case, you could look to claim compensation via the PCP agreement you entered at the time.


We have around 200 complaints from consumers unhappy about the levels of commission they’ve paid on their car finance agreements. Bea Lovestone, policy advisor at the Financial Ombudsman Service


What is Hidden Commission?

Hidden commissions occur when an agent, introducer, or finance broker sells you a loan or finance agreement from a bank or lender. In the case of car finance, it might be the car salesperson or dealership who brokers the finance deal.

If the car salesperson received a fee or commission for bringing the car finance deal to the bank, and the bank has not informed you of this, that is a hidden, secret, or undisclosed commission. The finance provider or bank must inform you of ALL of the fees within the transaction.

Below is a demonstration of the process:

You  Car Dealership/Salesperson  Hidden £££s  Finance Provider/Bank

Even in this circumstance, a general statement that “a commission may be paid in certain circumstances” is not adequate enough. The car dealership must inform you at the point of the car sale how must the commission was. If they failed to do so, it is a form of fraud. Both the finance provider and the finance broker may be liable for potential claims.

In this sense, financial brokers like the car dealership, owe some duties to their clients, such as:

  • Always act in the interest of the customer
  • Never be loyal to any bank, lender, finance provider
  • Always disclose any profit made to their customer
  • Never enter a conflict of interest – such as charging higher interest for a higher commission


Secret Commission in Car Finance PCP Deals

Official reports from the Financial Conduct Authority have shown that the car finance providers have a habit of concealing the existence of any commissions offered by their brokers. In their investigation in regard to the mis-selling of Car Finance (PCP), they found that:

  • Out of the 122 car dealerships visited by mystery shoppers just 11 car dealerships confirmed that commission will be added on this type of deal.

Conflict of Interest

This potentially leads to a huge conflict of interest. The car dealerships are supposed to be separate from the finance providers, but such discretion could lead to salespeople adjusting interest rates in order to earn more commission from the deal. In essence, there is an incentive for the salesperson to broker a finance deal at a higher interest rate, to the detriment of the customer.

Customers overcharged

Some cases show that customers are being overcharged by over £1,000 in interest in order for the dealership to obtain a higher commission pay-out. The FCA estimates this could be costing consumers £300 million annually.


In addition to this, the FCA found that an alarming number of the PCP (Personal contract purchase) firms have been carrying out this process without any regulation. These finance brokers often act without any oversight from the FCA which not only means the customer is not protected, but is also illegal.

The FCA bans hidden commission in car finance

In June 2020, the FCA banned commission linked to car finance deals outright. This means that car finance brokers won’t be allowed to charge a commission based on the interest rate offered from January 28th 2021.

This is particularly pertinent as figures show around nine in 10 new cars in Britain are bought on finance. The FCA estimate that the move will save consumers around £165million a year.

You are still able to claim compensation if you believe the commission was hidden from you in a previous car finance deal.


I’ve been doing this work for 38 years and, frankly, we were getting away with murder. We weren’t treating customers fairly and were, in effect, charging them to earn us money. The FCA’s ban means all the wheeling and dealing is over. It’s not trying to stop us from earning money – just from taking the p*ss. Anonymous finance broker, speaking to Autocar


What can you claim compensation for?

People who have been mis-sold their car finance agreement can potentially claim thousands in compensation if they believe they have fallen victim to any of the above issues.

When you bring forward a claim, you can ensure that the finance agreement is ended, whilst also receiving compensation intended to put you back in the place you were financially had you not been mis-sold the finance agreement. This can equate to thousands of pounds.

The Financial Ombudsman Service can also compensate you if the lender has gone out of business and is not able to pay you anything.


Who can claim Mis-Sold PCP Compensation?

If you bought via a car finance agreement in the past six years, then it is possible you may be eligible to claim mis-sold car finance compensation.

You may be eligible to claim if:

  • You purchased your car via car finance/PCP agreement
  • This happened between January 2007-October 2019

You may have been a victim of mis-sold car finance if you have received negligent or poor advice in relation to your car finance options or if you were not made aware of any commission being charged within the agreement.

You can also claim for multiple cars through one form using our eligibility checker. 


Was my car finance mis-sold?

In relation to your potential mis-sold PCP claim, your car finance deal may have been mis-sold if:

  • The car salesperson did not fully explain they would receive a commission on the sale of the car
  • The lender/bank did not fully explain the commission
  • The salesperson skipped through the car finance agreement Terms & Conditions
  • The customer felt pressured into the finance deal and was not given a range of options
  • The PCP payments were unrealistic and no finance credit checks were carried out


How is compensation calculated?

Evidence suggests that some customers have been charged thousands more than they should have. While the exact amount of compensation will vary, there are several factors to take into account. These include:

  • The size of the loan – the larger the loan, the more you’ll be owed
  • When you signed up – the longer you have been paying the loan off, the more you’ll be owed
  • The interest rate and the difference between the rate you should have been quoted

If you are unsure,’s expert panel of solicitors will be able to let you know if you are eligible to claim mis-sold car finance compensation and, if so, how much you might be able to retrieve in compensation.


What is the Mis-sold Car Finance Claim Process?

Talk To The Finance Provider

Before you begin any claim, you need to talk to your finance provider or credit broker first. They need to be given the chance to put any issue right. For most types of complaint, they have eight weeks to provide a final response to you. 

If You’re Unhappy With Their Response

If you are not happy with the response you get from the finance provider, or they don’t reply at all, you can begin formulating your complaint. You are able to bring a complaint forward to the Financial Ombudsman Service (FOS) directly by providing them details of your complaint, a copy of the car finance agreement, any other evidence and corresponding with their complaints team.

The FOS can take up to three months to deliver their first initial assessment of your case.

Getting Our Experts To Help’s experienced panel of are able to assist you after you have received an unsatisfactory response from the finance provider. Our panel are used to dealing with both finance brokers and the Financial Ombudsman Service, and understand the potential pitfalls to be aware of.

Once you send your car finance agreement over to us, our panel of Mis-sold Car Finance solicitors will review it and advise you if you have a claim for mis-sold car finance compensation.

Please note, if you do not have a copy of your car finance agreement, our experts can take you through the process of requesting a new document from your dealership.

Getting You Compensation

If our panel of mis-sold PCP solicitors accept your case, and you instruct us to act on your behalf, they can begin to make a claim against your lender.

This will be on a No Win, No Fee basis, meaning that you will only ever pay our legal fees if they are successful.

If the panel can determine that you were mis-sold your car finance agreement, they will look to recover compensation for you. They will keep you informed of the amount right the way through the process.


The FCA Findings on Car Finance Mis-selling

The FCA conducted a report into car finance and the potential mis-selling in the UK. They sent mystery shoppers to 122 car dealerships.

  • Out of the 122, only 11 car dealerships confirmed that commission will be paid
  • Only 31% of dealers explained to the customer that they do not own the vehicle at the end of the contract unless they pay the larger end payment
  • 28% of the car dealers failed to outline the consequences of missed payments
  • The FCA have estimated that the mis-sold car finance scandal may cost UK consumers £300,000,000 per year


Mis-sold Car Finance PCP FAQs

What is PCP?

Personal Contract Purchase (PCP) is essentially a personal loan taken out in order for you to purchase a car. Unlike a normal loan, however, you won’t be paying off the full value of the car, and you won’t own the car at the end of the deal – unless you agree a much larger final payment.

What will it cost to make a claim?

Bringing forward a mis-sold PCP car finance claim will cost you nothing. Making an enquiry to our expert panel is completely free. If they agree to take your claim on, it will be on a No Win, No Fee basis, meaning you will not be charged for the time they have spent on the case if they are unsuccessful.

How long will the claim take?

This varies from case to case. If the car dealership or finance broker accepts responsibility for the mis-selling, then you may receive compensation in a matter of months. If the liability is disputed, the claim could take anywhere between 12 to 18 months. Having an expert member of our panel working on your case can speed up your claim.


How Can We Help?

If you believe you have a mis-sold car finance claim,’s expert panel of solicitors can help bring your claim forward.

Our specialist panel of car claims solicitors are able to bring a claim on your behalf and not only hold dealerships and finance providers to account, but also get you compensation while doing so. 

Contact Us

If you believe you have been mis-sold a car finance deal, you can discover if you are eligible to claim today. Fill out our short enquiry form to start.

Don’t worry if you do not have all of the information to hand right now. Fill out as much as you can.

Ready To Get Started? provides a free educational service to the public, and connects potential claimants with pre-vetted legal firms operating on our panel. 

Our panel of legal firms all:

  • Operate on a No-Win, No Fee Basis
  • Require No Upfront Fees
  • Are Regulated by either the FCA or SRA

Start your claim today by completing the quick enquiry form below.

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