What Is a PCP Agreement?
Personal Contract Purchase (PCP) is the most popular form of car finance in the UK. Under a PCP agreement:
- You pay an initial deposit
- You make fixed monthly payments over an agreed term (typically 24–48 months)
- At the end of the agreement, you choose to make a final "balloon payment" to own the car outright, return the car, or part-exchange it for a new vehicle
PCP agreements were the most widely used car finance product during the period covered by the FCA investigation, making them central to the mis-selling scandal.
Why PCP Agreements Were Commonly Mis-Sold
During the period January 2007 to January 2021, most PCP agreements arranged through car dealerships included a discretionary commission arrangement (DCA). Under this system:
- The lender gave the dealer the power to set the customer's interest rate within a range
- The higher the rate the dealer set, the more commission the lender paid them
- Customers were not told about this arrangement
- Dealers therefore had a direct financial incentive to charge customers as much as possible
The FCA banned this practice in January 2021 after concluding it caused significant and widespread harm to UK consumers.
How Much Could You Get Back?
The amount of a PCP refund depends on several factors, including:
- The total value of your PCP agreement
- The interest rate you were charged
- The rate you should have been offered without the DCA
- The length of your agreement
The FCA estimates the average compensation for a mis-sold car finance agreement is approximately £700. However, for larger PCP agreements — particularly those on higher-value vehicles — the refund could be considerably more.
Use our PCP claim calculator to get a personalised estimate based on your agreement details.
Who Can Claim a PCP Refund?
You may be eligible to claim a PCP refund if:
- You took out a PCP agreement through a franchised or independent car dealership
- The agreement was signed between January 2007 and January 2021
- The finance was arranged by the dealer rather than sourced independently
- You were not told the dealer received commission linked to your interest rate
- The lender was one of the major UK car finance providers operating during this period
You do not need to still own the car or have the finance ongoing to be eligible.
Which Lenders Are Involved?
PCP agreements affected by DCAs were issued by a wide range of UK lenders, including:
- Black Horse Finance
- Santander Consumer Finance
- Close Brothers Motor Finance
- MotoNovo Finance
- Barclays Partner Finance
- Volkswagen Financial Services
- BMW Financial Services
- PSA Finance UK
- Ford Credit
- Alphera Financial Services
How to Start Your PCP Refund Claim
- Check your eligibility using our free car finance claim check tool
- Gather basic details — your lender name, vehicle purchase year, and finance type
- Submit your details via the form below
- Case reviewed by an FCA-authorised claims specialist
- Claim submitted to your lender or the Financial Ombudsman if required
- Refund paid directly to you if the claim is successful
Most PCP refund claims are handled on a no-win, no-fee basis.
Frequently Asked Questions
Can I claim a PCP refund if the agreement has ended?
Yes. Whether your PCP agreement is fully paid off, the car has been returned, or you part-exchanged for a new vehicle, you may still be eligible to claim. Eligibility is based on the agreement itself and whether a DCA was in place — not whether the finance is still ongoing.
How long does a PCP refund claim take?
Timelines vary by lender and case complexity. The FCA's compensation scheme is expected to result in payments beginning in 2026. Submitting your details now ensures your claim is in the queue when the scheme goes live.
Do I need a solicitor to claim a PCP refund?
No. You can check your eligibility using our free tool. An FCA-authorised claims specialist will handle the process on your behalf if you proceed, typically on a no-win, no-fee basis.
What if I don't have my original PCP agreement?
You do not need your original paperwork to start a claim. You can request a copy from your lender under the Consumer Credit Act 1974, or check your credit file with Experian, Equifax, or TransUnion to confirm the lender details.
Is there a deadline for PCP refund claims?
The FCA has set deadlines for lenders to handle complaints as part of the compensation scheme. It is advisable to submit your claim as soon as possible to avoid missing any applicable deadlines.