PCP Claims UK
Claim mis-sold car finance compensation on a No Win, No Fee Basis
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Were You Mis-Sold A HP Or PCP Car Finance Claim?
Commission incentives to car finance brokers have been increasing the cost of motor finance for consumers for years. Thousands of UK car buyers have effectively been overpaying for their vehicle finance due to the mis-selling practices which meant that interest rates being charged were well inflated and salespeople were earning large commissions.
In some cases, purchasers of vehicles on Hire Purchase and Personal Contract Purchase finance deals may have overpaid by several thousand pounds in additional interest due to practices which allowed dealers to set inflated rates of interest. This could potentially be claimed back where it can be proven that the customer was not presented with all the information about the agreement, was mis-led, received bad advice, and not informed of any commissions or interest charged as part of the agreement.
Stat: FCA found that higher broker commissions can result in a customer with a £10,000 loan paying around £1,100 more in interest charges over a four-year finance agreement.
How Do I Know If I Can Make A Claim?
If you entered into a HP or PCP car finance agreement before 28 January 2021 and the salesperson did not provide you with information about the commission and amount of commission they were getting from the finance company for signing you up to the agreement, then it is likely that you could be able to claim for mis-sold car finance compensation.
Those who could be able to make a HP or PCP claim include:
- Anyone who bought car, vans, camper vans and motorbikes under DCAs primarily for personal, not business use
- The PCP or HP agreement had to be taken out prior to 28 January 2021
- People with a current PCP or HP finance agreement in place
- People whose PCP or HP agreement ended within the last 6 years
- Those with older agreements who have only just learned of the issue (who potentially have 3 years to bring a claim)
Make Your PCP Claim Today
We’ll refer you to a panel of legal experts with expertise in both HP and motor vehicle PCP finance claims
Mercedes-Benz
Those who entered into a PCP arrangement with a finance company to buy a new or used Mercedes Benz car before 28 January 2021 may be able to claim for compensation if there were hidden commission arrangements in place which led to them paying more for their car finance.
BMW
UK residents who entered into a PCP agreement to buy a BMW (new or used) may be able to claim compensation for mis-sold car finance if they were not told about the commission arrangements which often resulted in unfair or higher interest rates.
Ford
Those who bought a Ford vehicle using Personal Contract Purchase car finance agreement before the 2021 cut-off point may be able to claim compensation if the car dealer did not reveal hidden incentives, including discretionary commission arrangement which inflated interest rates and payments for purchasers.
Audi
Purchasers of new or used Audi vehicles using a PCP car finance agreement made before 28 January 2021 may be able to claim compensation if car dealers did not inform them about commission arrangements which incentivised charging higher interest rates in order to to obtain bigger commission payouts.
How PCP Claims Work
Our team of expert PCP claim solicitors can help you get the compensation you deserve.
See how PCP claims work with our easy to understand video.
How Much Compensation Could I Claim For Mis-Sold PCP Car Finance?
Compensation for a mis-sold car finance claim is not a set amount, but instead is dependent on a number of factors relating to the PCP finance agreement, including the interest rates charged, the amount of finance and when the finance agreement was signed. The longer the car finance agreement, the greater the potential compensation, if you have been paying it for a considerable time. Find out with our mis-sold finance eligibility checker today.
It is possible, if you have had multiple PCP car finance and HP finance deals, that you could be due multiple payouts due to DCAs. This applies to a range of vehicles including cars, vans, and trucks.
The FCA have estimated that a customer taking out a personal contract purchase agreement of £10,000 could have paid more than £1,100 in additional interest. If your PCP deal was for a vehicle of much greater value, your claim could be worth several thousands of pounds.
How Is Is That People Can Now Make PCP Claims?
Following the launch of a Financial Conduct Authority investigation into hidden and unfair car finance commissions, it was found that many people could be owed thousands back due to practices that meant customers were effectively overpaying on their PCP and HP finance. It is estimated that around 40% of car finance deals were affected by ‘discretionary commission arrangements’ (DCAs) which allowed brokers and car dealers to up the interest rate to increase their own level of commission. The FCA banned DCAs in January 2021, meaning any personal contract purchase or hire purchase agreement after this date will not be affected. HP and PCP agreements today are much fairer.
Car Finance Mis-selling Resulted Due To The Following:
- Brokers or car dealerships are able to set the interest rate — with a higher rate meaning the incentive of a higher commission for them.
- Some customers paid significantly more for their motor finance deal because of the way lenders chose to reward their brokers.
- Customers were not aware of the existence of commissions and the structure of these.
- Affordability was not taken into account for customers.
How Long Does A PCP Claim Take?
Claims can vary in terms of length to be settled, depending on whether the car dealer and/or finance company accept responsibility for mis-selling and agree to pay compensation. In these instances, it can be settled in a matter of months. Where allegations are disputed, claims may have to go to the Financial Ombudsman Service and can sometimes take up to 12 or even 18 months to be settled.
Our Process
How Our PCP Mis-sold Finance Process Works
Getting started with your claim is an easy 4-step process. Our streamlined approach ensures you quickly address any overpayments made on your current or past vehicle purchased through mis-sold PCP finance. Simply follow these steps, and our team will handle the rest to secure the compensation you deserve.
1.
Make Appointment
Get in contact and let us know about your potential claim.
2.
Support Your Claim
Provide any available evidence/documentation relating to your claim.
3.
Allow Checks
4.
Leave It To Us
Is There A Time Limit On PCP Claims?
With mis-sold finance packages of this nature, Financial Ombudsman rules state that you would have a maximum of 6 years from when you started your car finance agreement to make a complaint. If your agreement is older than this, but you only learned of any issue recently, you have 3 years from when you become aware. You are unlikely to be able to claim for older agreements which ended prior to 2007.
PCP Mis-sold Finance FAQs
In this section, we’ve included the answers to some questions we’re frequently asked.
Personal Contract Purchase (PCP) car finance allows you to pay for your car across monthly payments and one final sum. It can be the ideal way for those who need a new car, but don’t have the cash to pay for it. Unlike a standard personal loan, you'll make an upfront payment (deposit) but won’t be paying off the full value of the vehicle, or own it, unless you opt to pay the large final balloon payment (based on the car’s value at the end of the deal). This sort of car finance loan is often arranged by brokers or car dealerships.
HP car finance agreements - or Hire Purchase - is a method of buying a new car on finance without having to pay upfront. Here, you would put a down-payment or deposit on the car and then pay off the rest over a fixed term, arranged with the finance companies. You pay a monthly cost for the car, plus interest. It's known as a hire purchase because you don't actually own the car until you make the final purchase - if you miss payments, then the car will return to its original owner - the car dealership you bought it from.
Commission arrangements provided incentives for brokers and car dealerships to arrange finance at higher interest rates, which would net them a higher commission. This practice means that you may be one of those who signed up to car finance deals that cost you far more in repayments than it otherwise should have done.
Claims may be applicable to current and past PCP and HP finance agreements, so it's possible to make a claim for mis-sold car finance even if the car’s now paid off, you are still paying for it, or you no longer own the vehicle.
The Financial Conduct Authority has been investigating car finance agreements following a high volume of complaints from consumers who believed they had been overcharged for loans taken out before discretionary commission arrangements were banned in 2021. Initial suggestions from FCA in relation to car finance were as following:
- Dealers were incentivised by brokers to charge customers higher interest rates in order to receive higher commissions
- Most UK customers were NOT made aware of the increased commissions arrangements and how they were being charged
- Some customers could have paid in excess of £2,000+ extra in interest charges for their PCP agreement
Stat: FCA estimate that commission models which allow broker discretion over the interest rate could be costing customers £300m more annually when compared against flat fee models.
Ideally, if you have copies of your finance agreement then this will help us to see if you have a valid claim. We can still help you even if you are unable to locate the paperwork by contacting the relevant finance company to get the documentation relating to your finance deal.
If you are unable to find any paperwork and don’t know the name of the firm you had your PCP agreement with, your bank statements will show regular payments being made to a specific company. Failing that, check your credit report. Details of any agreement that has been active in the past six years, should appear there. If you still are unable to find any finance agreement details, you could contact the car dealership or car salesperson where you bought the car to get the finance provider details.
Unfortunately, if the lender is no longer in business, you would be unable to make mis-sold car finance claims against them. There is a possibility, however, of claiming against the motor dealer or broker who arranged the car finance for you.
You can make a free enquiry regarding a potential claim and we will review your car finance deal to determine if there is a genuine case to answer. If we feel you have a case worth pursuing, we will work for you on a no win-no fee basis, meaning that if the case is unsuccessful, you will not owe us a thing.
You can't be blacklisted by car finance providers or other lenders for making a claim. The Financial Ombudsman ruled out lenders being able to block customers or offering different products if they have previously made a claim. Essentially, claims cannot be included in any product application assessments.
The Financial Conduct Authority has said that mis-sold car finance, with firms not lending responsibly, has led to consumer harm on a potentially significant scale. With around 40% of car finance deals involving ‘discretionary commissions agreements’, the potential number of claims could be astronomical.
However, it is worth noting that not all firms used DCAs, so it’s possible that your car deal finance arrangements were not affected by mis-selling. If you are unsure, it is still worth enquiring to ensure you don’t miss out, as it's completely free to check.
Personal Contract Hire (PCH) is something completely different to PCP as it relates to the lease of vehicles rather than an intent to purchase it. As such, PCH finance agreements do not form part of the PCP car finance investigation being undertaken by the FCA.
As 0% interest deals do not have a discretionary commission arrangement, if you purchased your vehicle under a genuine interest-free deal, there is no issue with the car finance and therefore no possibility of making a claim.
Start Your PCP Claim Today
If you suspect your PCP car finance was mis-sold and that there were undisclosed or hidden commission payments and generally poor advice, we can help. Whether you had one or more than one vehicle, our team can connect you with expert car finance claim solicitors who excel at getting clients the maximum compensation they deserve. The legal expert assigned to your case will work on a No Win, No Fee basis, ensuring you incur no risk or cost if your claim is unsuccessful. Get in touch today for more information and to start your claim.