PCP Claims - Claim Compensation For Your Mis-sold PCP Finance Agreement

What Is A PCP Claim?

You may have a legal right to make a PCP claim if you think you were mis-sold a personal contract purchase (PCP) finance agreement when purchasing your vehicle.

You may be able to claim for a mis-sold PCP car finance agreement if the salesperson failed to give you all of the information about your agreement, misled you, provided poor advice, or did not inform you of any commissions or interest being charged as part of the agreement.

A PCP agreement is considered to be mis-sold if the buyer was not given all the information needed to assess whether the contract was financially viable or offered good value for money.

A recent Financial Conduct Authority (FCA) investigation discovered extensive evidence of car finance mis-selling on all types of UK car finance agreements.

The Financial Conduct Authority (FCA) has said that commission was paid on 95% of UK car finance agreements, and it is estimated that as much as 40% of these agreements may have been mis-sold.

When Can I Claim For A PCP Refund?

You are eligible to claim for mis-sold PCP finance if the salesperson failed to present all finance options, adequately explain the details of your PCP contract, and the interest rates charged, make affordability checks or inform you if they would receive a commission.

The law requires the lender or car dealership to prove that they acted lawfully throughout the entire process. If they cannot provide this proof, you may have the right to reclaim money from your PCP car finance agreement. You may be entitled to reclaim money for your PCP car finance agreement if this cannot be proven.

Mis-sold PCP claims can be made in the following instances:

• PCP finance claims apply to all types of vehicles, including cars, vans, trucks, and motorcycles.
• You can claim for both new and used vehicles purchased through PCP financing.
• Claims can be made for active PCP agreements with ongoing payments.
• Claims can also be made for completed PCP agreements, even if the vehicle has been fully paid off.
• Multiple vehicles can be included in a single claim.
• You may still claim if the vehicle was repossessed.

Additionally, the vehicle has to be primarily for personal use, not business use.

How Can I Check If I Have A PCP Claim?

You may be eligible to claim for compensation for your car finance agreement if you purchased a car or motor vehicle through PCP financing between April 2007 and January 28, 2021, and the agreement was potentially mis-sold.

Your PCP agreement might have been mis-sold if:

• The salesperson did not disclose that they would receive a commission from the lender for arranging the finance agreement
• The salesperson failed to inform you of all available finance options, including explaining the differences and responsibilities of each type of product
• The salesperson did not fully disclose the interest rates available for all finance options and how these rates might vary
• The salesperson did not offer you the cheapest interest rate available to you
• The salesperson did not thoroughly explain the finance contract’s details, including all Terms and Conditions
• The salesperson did not conduct proper affordability checks
• The salesperson applied high-pressure sales tactics or did not give you enough time to consider the agreement.

It is the responsibility of the lender or car dealership to prove that they adequately fulfilled all of these obligations. If they cannot, you may have the right to make a PCP claim.

How Much Money Could I Reclaim For My Mis-sold PCP Agreement?

The level of compensation you may be able to reclaim is based on several factors, including:

• The amount agreed within your PCP finance loan — generally, the larger the loan, the more you may be able to reclaim
• The duration of your finance agreement — If you agreement is spread out over a longer period of time, you may be owed more
• The interest rate you paid and the difference between this rate and the rate you should have been offered.

Furthermore, the Financial Ombudsman Service awards an additional 8% interest on the overpayment amount.

However, determining the appropriate interest rate can be challenging, as you may not know what rate should have been offered to you.

What Is The Average Payout For A PCP Refund?

Representing thousands of clients, we have successfully won over 90% of mis-sold car finance claims, including many PCP finance claims, that have gone to trial since January 2022, with the average compensation payout being over £1,600.

However, refunds for mis-sold PCP finance can sometimes be as much as £10,000 depending on the value of the vehicle and the length of your agreement.

PCP Claims Calculator – Check Your PCP Finance Refund

Our calculator below estimates the size of a refund you may receive when making a PCP claim.

Add the value of your vehicle, the number of years of your agreement, and the interest rate you paid. Then, compare this against a rate you may have been offered if you weren’t mis-sold.

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Please note that this calculator only provides a rudimentary calculation of how much extra interest has been paid on a Hire Purchase agreement. The calculation will be different for PCP agreements and does not factor in the actual length of the agreement or any compensatory interest which may be awarded.

The calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If in doubt please take legal advice from a firm with suitable expertise, such as Bott and Co.

What Types Of Mis-selling Can I Make A PCP Compensation Claim For?

From the thousands of PCP claims clients we have represented, the most common types of mis-selling are:

• Hidden Discretionary Commission Arrangements
• Inflating Interest Rates To Get More Commission
• Not Explaining All Financing Options To The Customer
• Not Disclosing Who Owns The Car At The End Of The Agreement
• Not Carrying Out Affordability Checks

What Are Discretionary Commission Arrangements In PCP Finance Agreements?

Discretionary commission arrangements, sometimes known as DCAs, were a commission model that allowed lenders to authorise brokers to adjust the interest rates they offered customers for PCP car finance agreements.

The broker was incentivised to increase their commissions by charging the customer a higher interest rate than necessary. The Financial Conduct Authority (FCA) banned DCAs in January 2021.

Simple Claim Process

• Add your details to our claim checker
• We will confirm if you were mis-sold
• We will negotiate a settlement with the lender
• You receive the compensation you are due.

Which Makes Of Cars Can I Make A PCP Finance Claim Against?

Many mis-sold PCP claims will be against the banks or lenders who have agreements with the car makers.

However, if you think you have a right to claim, you can claim against any car maker. We have ongoing litigation or have settled cases against well-known car companies such as Audi, BMW, Hyundai, Kia, Mercedes Benz, Toyota, Vauxhall, and Volkswagen.

Which Lenders Can I Make A PCP Claim Against?

We have PCP claims in progress against a large number of lenders, including:

• Black Horse Ltd
• Blue Motor Finance Ltd
• BMW Financial Services (GB) Ltd
• CA Auto Finance UK Ltd
• Close Brothers Ltd
• Clydesdale Financial Services Ltd
• FCE Bank PLC
• FirstRand Bank Ltd (London Branch)
• Hyundai Capital UK Ltd
• Mercedes-Benz Financial Services UK Ltd
• Moneybarn No. 1 Ltd
• NIIB Group Ltd
• PSA Finance UK Ltd
• RCI Financial Services Ltd
• Santander Consumer (UK) PLC
• Startline Motor Finance Ltd
• Toyota Financial Services (UK) PLC
• Vauxhall Finance PLC
• Volkswagen Financial Services (UK) Ltd

How Far Back Can I Make A PCP Finance Claim?

You have up to six years from the date of the agreement or three years from when you became aware that you had cause to raise a complaint.

Reclaim PCP Car Finance With Bott and Co Solicitors

As the UK’s leading solicitors in mis-sold car finance claims, we have won several significant cases, including the pivotal test case of Mrs Young vs Black Horse, which has opened the doors to thousands of people reclaiming compensation for mis-sold PCP agreements.

We have spent millions in litigation, representing the rights of car finance consumers, and have won numerous test cases that have set a precedent for everyone who may have been mis-sold to have the right to claim, whether Bott and Co. represent them or not.

Frequently Asked Questions On Mis-sold PCP Claims

Can I Make a PCP Claim For More Than One Vehicle?

Yes, you can make a claim for each separate agreement you entered where you think you may have been mis-sold.

Can I Make a PCP Claim If The Lender Has Gone Out Of Business?

If the lender has gone bust, you can no longer claim against them. However, you may still be able to claim from the dealer or broker that arranged the PCP agreement.

I’ve Already Made A PCP Claim Directly With The Lender, But I Haven’t Had A Response. What Should I Do?

If you have submitted your letter of complaint directly to the lender under the DISP rules (Dispute Resolution Complaints), the lender has up to eight weeks to respond.

How Do We Know PCP Mis-Selling Took Place?

In 2021, a Financial Conduct Authority (FCA) investigation discovered widespread mis-selling of car finance agreements.

As part of the investigation, the FCA sent mystery shoppers to 122 car retailers throughout the UK to discover:

• Of the 122 retailers, only 11 told their customers the dealership might receive a commission for arranging the deal
• Only 31% of brokers explained to PCP finance customers that they do not own the car until all sums (including a balloon payment) have been paid
• Just 28% of brokers disclosed the total amount payable and explained the consequences of a missed payment or withdrawal from an agreement
• On a typical motor finance agreement of £10,000, a customer may have been charged £1,600 more in interest through a PCP agreement than through a different financing plan.

As a result of the investigation, the FCA banned commissions linked to car finance in June 2021. The FCA estimates the move will save consumers around £165 million a year.