PCP Car Finance Refund Guide
A practical overview of your rights and next steps
- No Win, No Fee Guarantee
What Happened?
Widespread Mis-selling in Car Finance Agreements
The Financial Conduct Authority (FCA) uncovered widespread issues in car finance agreements, particularly with discretionary commission arrangements (DCAs). These allowed dealers to increase the interest rates on loans in exchange for higher commissions — often without the customer’s knowledge.
The FCA found this practice to be unfair and banned it in January 2021. However, millions of agreements signed before that date may have been affected.
January 2021
FCA bans DCAs.
January 2024
FCA launches a major investigation into past mis-selling.
October 2024
Court rules customers must give “fully informed consent” for commission payments.
August 2025
FCA announces work on a redress scheme.
October 2025
FCA announces more clear guidelines
EXPECTED!November 2025
FCA finalizes it's scheme
EXPECTED!2026
Processing redress claims begins
Who is Eligible for a Refund?
You Are Likely Eligible If...
You may have a claim for compensation if you:
- You signed a PCP (Personal Contract Purchase) or Hire Purchase (HP) agreement between April 2007 and 28 November 2024.
- The vehicle was a car, van, camper van, or motorbike.
- The agreement was for personal use (business use may still qualify under £25,000).
- The agreement has been paid off, settled early, or the vehicle was sold or repossessed.
- You had more than one finance agreement – each may qualify for compensation.
What Can I Expect?
What Your Compensation Might Look Like
The size of any refund depends on the terms of your finance agreement. As the FCA finalizes it's redress scheme, initial figures show about 14 million people may be impacted resulting in almost £9 in compensation. Individual claims will vary based on the size of your loan, the interest rate, and the number of qualifying finance agreements per person.
- FCA estimates 14 Million people are affected
- £9 Billion total potential payouts
- Larger loans may mean higher compensation
What Should I do?
Steps to Take If You Think You’re Affected
Check your paperwork
Look for PCP or HP agreements within the eligible dates.
Request information
If you no longer have the paperwork, lenders can often be traced using credit reports or bank statements.
Keep track of updates
The FCA has instructed lenders to respond to complaints by December 2025, and a formal compensation scheme is expected in 2026.
Submit a complaint
You can do this directly to the lender. According to the FCA scheme, lenders are expected to reach out to affected clients.
You can also use a solicitor/claims service. Lenders are only expected to contact regarding the last 6 years of agreements. A dedicated service may be able to find better results spanning further back.
Important Notes
Things to Keep in Mind
Refunds are not automatic. You need to make a claim.
Once the redress scheme is active, deadlines will apply.
Not all agreements were mis-sold - but millions were affected.
If your lender has shut down, alternative routes may still be available.
More Information & Help
Useful Resources
Financial Conduct Authority
Latest updates on the redress scheme and your rights.
Financial Ombudsman Service
Independent support for dispute resolution.