Car finance has made vehicle ownership more accessible than ever, but in recent years, a growing number of drivers have started to question whether the deals they signed were as fair as they first appeared. At the centre of this growing scrutiny are PCP claims, which have brought to light serious concerns about transparency and fairness in how car finance was sold.
As 2025 unfolds, many drivers are still unaware that they may be eligible to challenge a previous agreement. This guide offers a clear explanation of what PCP claims are, why they matter, and what steps drivers can take if they believe they were affected.
What Is a PCP Agreement?
A PCP, or Personal Contract Purchase, is a popular form of car finance. It allows buyers to pay lower monthly instalments than a traditional hire purchase agreement by deferring a portion of the car’s value to the end of the term. When the agreement ends, the driver can choose to pay the final lump sum to keep the car, return it, or start a new agreement on a different vehicle.
Although PCPs are often marketed for their flexibility, they are also more complex than many drivers realise. The way interest is calculated, the impact of mileage limits, and the cost of optional extras can all affect the overall value of the deal. These layers of complexity are part of the reason why so many complaints have now emerged.
Why Are PCP Claims Being Made?
Concerns around PCP agreements largely stem from how they were sold. In many cases, drivers were not given a full explanation of the terms, particularly when it came to how interest rates were determined. Some dealers or brokers received commissions for arranging finance deals, and in some situations, they were able to increase the interest rate in order to boost their own earnings. This practice, known as discretionary commission, was rarely disclosed to the customer.
If a driver was not told about this, or if they were led to believe the interest rate was fixed or based purely on creditworthiness, they may have been mis-sold the agreement. As a result, they may be eligible to bring forward a claim.
Car finance claims are particularly relevant for agreements signed between 2007 and 2021, when this type of commission structure was commonly used in the car finance industry.
Signs You May Have Been Mis-Sold
Not every PCP agreement qualifies for a claim, but there are several warning signs that suggest you may have been mis-sold your finance deal. These include:
- The total cost of the agreement was not clearly explained
- You were not informed that the dealer or broker received a commission
- The interest rate seemed high without justification
- You felt rushed or pressured into signing
- Add-on products were included without your clear approval
- You believed you were purchasing the vehicle outright when you were not
If any of these situations sound familiar, it may be worth reviewing your finance agreement or seeking independent advice.
What Can You Claim For?
A valid claim could result in compensation or a refund of the interest you should not have paid. In some cases, this might mean a partial refund of payments or the removal of the interest portion of the agreement. Each situation is assessed on a case-by-case basis, and outcomes can vary depending on the details of the agreement and the evidence available.
Importantly, even if you have finished repaying the agreement or no longer own the vehicle, you may still be eligible to raise a concern. Claims are typically based on how the deal was presented at the point of sale, not on whether the car is still in your possession.
Steps to Take if You Suspect Mis-Selling
If you think your finance agreement may have been mis-sold, taking action does not have to be difficult. The key is to start by gathering information and understanding your options.
Start with the following steps:
- Locate your original finance agreement and review the terms
- Make a note of any details you were told at the time of signing, particularly relating to interest and commission
- Check if there are any unexplained or bundled extras included in your contract
- Consider how the deal was explained to you and whether you were given the chance to compare finance options
- If you were unaware of commission payments or were misled about the structure of the deal, explore whether you may qualify for a claim
Keep all documents and correspondence in a safe place, as they may be useful if you decide to escalate the matter.
How PCP Claims Fit into the Bigger Picture
The rise in PCP claims is part of a broader review of fairness in consumer lending. Many people are only now beginning to realise how little they knew about the finance products they signed up for. Greater awareness, combined with a push for regulatory reform, has created a new environment where consumers are more empowered to question their agreements.
In addition to PCP-related complaints, other car finance claims are also gaining attention, including those involving hidden fees, bundled add-ons, or vague contract terms. Together, these concerns are prompting industry-wide discussions about transparency, disclosure, and the future of car finance in the UK.
Final Thoughts
For many drivers, a PCP agreement felt like a practical way to afford a car. However, if that deal was not clearly explained, or if the terms were skewed by undisclosed incentives, the long-term impact could be significant. In 2025, more people than ever are taking a second look at their agreements and asking important questions about fairness and transparency.
If your finance agreement was signed between 2007 and 2021 and involved a PCP structure, you may have grounds to explore a claim. It is not just about the money, but also about holding the industry to account and ensuring that future buyers are given the clear, honest information they deserve.
Understanding your rights and knowing the signs of mis-selling can make all the difference. Before accepting that your finance agreement was fair, take a moment to revisit the paperwork and see whether you were given the full picture.
