PCP (Personal Contract Purchase) car finance agreements have become increasingly popular across the UK. While they offer flexibility, many consumers are now questioning whether they were mis-sold these deals. The rise in complaints has led to a surge in PCP claims, with some drivers successfully reclaiming thousands of pounds. However, misinformation spreads quickly, leaving many confused about their rights. This guide debunks the most common myths about PCP claims and provides clear, evidence-based advice.
Myth 1: If You Signed the Contract, You Can’t Make a Claim
Many believe that signing a PCP agreement means they have no right to claim. However, financial regulations require lenders to provide full transparency about the terms. The Financial Conduct Authority (FCA) has repeatedly stated that lenders must explain interest rates, balloon payments, and commission structures. If a lender failed to disclose crucial details, you might have been mis-sold the agreement, making you eligible to claim.
Myth 2: PCP Claims Are Only for Those in Financial Difficulty
A common misconception is that only people struggling financially can make a PCP claim. In reality, any consumer who was misled or not provided with key information can submit a claim. The FCA has found cases where dealers concealed commission charges, resulting in higher monthly payments. Even if you comfortably afford your PCP agreement, you still have the right to compensation if it was mis-sold.
Myth 3: You Need a Solicitor to Make a PCP Claim
Many assume that claiming compensation requires expensive legal representation. While solicitors can assist, the process can often be completed without one. The Financial Ombudsman Service (FOS) allows consumers to file complaints directly. If the lender rejects your complaint, the FOS investigates at no cost to you. This consumer-friendly process ensures that legal fees don’t prevent people from pursuing valid claims.
Myth 4: PCP Claims Will Affect Your Credit Score
Some drivers hesitate to make a claim because they fear it will impact their credit score. However, submitting a complaint does not appear on your credit report. If you stop making payments while disputing the agreement, that could affect your score. As long as you continue meeting your contractual obligations, making a PCP claim has no negative impact on your financial record.
Myth 5: You Can Only Claim If You Have Finished the PCP Agreement
Another widespread myth is that you must complete your PCP term before making a claim. In reality, you can submit a complaint while still making payments. If the claim is successful, you could receive a refund for overpaid interest or excessive charges. The FCA has urged lenders to reassess past agreements, meaning you don’t need to wait until the end of your contract to take action.
Myth 6: All PCP Agreements Were Mis-Sold
While many people were mis-sold PCP finance, not all agreements qualify for a claim. If your dealer clearly explained the costs, commission, and interest rates, you likely have no case. However, studies show that 95% of car finance deals between 2015 and 2020 included commission structures that could incentivise dealers to inflate interest rates (Source: Financial Conduct Authority, 2023). If you were unaware of this when signing your contract, it’s worth investigating a potential claim.
What Should You Do Next?
If you believe your PCP agreement was mis-sold, gather your contract details and check for unfair terms. You can start by raising a complaint with your lender. If they reject your claim, escalate the case to the Financial Ombudsman Service. Successful claims have resulted in refunds averaging £1,200 (Source: Financial Ombudsman Service, 2023). With millions of car buyers potentially affected, now is the time to check whether you have been overcharged.
Final Thoughts
PCP claims are not just for those struggling with repayments—they are about financial fairness. Misinformation prevents many consumers from taking action, but knowing the facts empowers you to reclaim money that is rightfully yours. If you suspect you were mis-sold a PCP deal, don’t ignore it. Review your agreement and explore your options today.