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If you bought a car on PCP or HP finance between 2007 and 2024, there is a strong chance you were overcharged without knowing it. The FCA estimates that around 14 million car finance agreements could be affected by hidden commission practices, and its proposed compensation scheme could pay out approximately £8.2 billion. But before you can claim, you need to understand one thing: your PCP eligibility.
This guide explains every eligibility criterion for a mis-sold car finance claim in plain English. By the end, you will know whether your agreement qualifies and what steps to take next.
What Makes You Eligible for a Mis-Sold PCP Claim?
PCP eligibility comes down to a handful of clear criteria. If your finance agreement meets the conditions below, you may have grounds for a mis-sold PCP claim.
Your Agreement Was Taken Out Between 6 April 2007 and 1 November 2024
The FCA's proposed motor finance redress scheme covers regulated PCP and HP agreements entered during this window. If your finance agreement falls within these dates, you meet the first eligibility requirement. This applies regardless of whether you have since paid off the finance, returned the vehicle, or traded the car in for a new one.
Your Agreement Was a PCP or Hire Purchase (HP) Finance Deal
The scheme covers two types of regulated car finance. Personal Contract Purchase (PCP) agreements, where you pay monthly instalments with an optional balloon payment at the end, and Hire Purchase (HP) agreements, where you pay fixed monthly amounts until the loan is cleared and you own the vehicle outright. If you are unsure which type of agreement you had, our guide on what is a PCP claim explains the differences.
Personal loans arranged independently of a car dealer and cash purchases are not covered by this scheme.
A Commission Was Paid That Was Not Properly Disclosed
This is the core of most mis-sold PCP claims. When you arranged your finance through a car dealer or broker, they typically received a commission from the lender. In many cases, you were never told about this payment. The FCA car finance investigation found that non-disclosure of commission was widespread across the motor finance industry.
The proposed redress scheme covers three categories of commission arrangement:
Discretionary Commission Arrangements (DCAs)
Under a DCA, the dealer or broker had the power to adjust the interest rate on your agreement. A higher rate meant a higher commission for the dealer, paid by the lender. This practice was banned by the FCA in January 2021, but it affected agreements going back to 2007. If your agreement included a DCA, you are highly likely to qualify for compensation. Read our complete guide to Discretionary Commission Arrangements for full details.
Unfairly High Commission
Even where the commission was not discretionary, you may still be eligible if the amount was disproportionately high. The FCA's consultation paper CP25/27 proposes that agreements where commission exceeded 35% of the total cost of credit and 10% of the loan value would qualify for review. In its 2019 findings, the FCA confirmed that on a typical £10,000 agreement, a DCA added approximately £1,100 in extra charges over four years.
Contractually Tied Arrangements
In some cases, a dealer or broker claimed to compare finance options from multiple lenders but was in reality tied to a single provider. If your dealer was effectively offering only one lender's products without telling you, this restricted your ability to secure a competitive rate and may make your agreement eligible.
Your Agreement Was Regulated by the FCA
The scheme covers regulated consumer credit agreements. Most standard PCP and HP deals for personal use are regulated. However, some business-use agreements or unregulated finance products may fall outside the scheme. If you are uncertain, our team can check this for you when you submit your details.
Who Is Not Eligible for a PCP Refund?
While PCP eligibility is broad, there are some situations where a claim is unlikely to succeed:
- You had a genuine 0% interest deal. If no interest was charged, there was no scope for the dealer to inflate the rate, so compensation is generally not applicable.
- Your agreement was taken out before 6 April 2007 or after 1 November 2024. These fall outside the dates covered by the proposed scheme.
- You have already received compensation for the same agreement. If a lender has already paid redress on a specific agreement under a previous complaint, that agreement is excluded from the scheme.
- Your finance was a personal loan arranged independently of the car dealer or broker. Only PCP and HP agreements arranged through a motor dealer or credit broker are covered.
Common Questions About PCP Eligibility
What if I have changed address since taking out the finance?
This does not affect your PCP eligibility. We can locate your agreements using a soft credit check, which traces your finance history regardless of address changes. The check does not affect your credit score.
What if I do not have the original paperwork?
You do not need any documentation to start. Our team retrieves your agreement details directly. Even agreements from 2007 can be located this way. For more detail on what constitutes a valid claim, see our guide on how to check if you have a valid PCP claim.
Can I claim for multiple vehicles?
Yes. If you had several PCP or HP agreements during the eligible period, each one is assessed individually. If more than one was mis-sold, you can claim for all of them. The FCA estimates average compensation of around £700 per agreement, so multiple qualifying agreements can result in a significantly larger total payout. Our guide on how much compensation you could receive explains what determines the amount.
What if my lender has gone out of business?
If the lender has been dissolved, you may not be able to claim. However, if it has been acquired by another company or is in administration, claims can still be pursued. We claim against all major UK motor finance providers. See the full list of lenders we claim against.
How the FCA Redress Scheme Affects Your Eligibility
The FCA's proposed motor finance redress scheme is designed to be opt-in. This means that if you have already submitted a complaint, your lender is required to contact you within three months of the scheme launching to tell you whether you are owed compensation. If you have not yet complained, lenders must contact you within six months and invite you to participate.
The final rules for the scheme are expected to be published in late March 2026. The FCA announced on 24 March 2026 that it will set out its approach on 30 March 2026. Once launched, lenders will have an implementation period of three to five months before outcomes are issued. For every key date and milestone, visit our FCA investigation full timeline.
Submitting your claim now does not prevent you from participating in the scheme. In fact, early submission means your case is already in the queue, which could mean a faster outcome once the scheme goes live.
How to Spot the Signs That Your Agreement Was Mis-Sold
Beyond the formal eligibility criteria, certain warning signs suggest your car finance may have been mis-sold:
- The dealer arranged the finance for you and never mentioned that they would receive a commission
- Your interest rate seemed higher than rates advertised elsewhere
- You were not offered the option to arrange finance directly with the lender or to compare different lenders
- The dealer pressured you to sign quickly or discouraged you from taking the paperwork away to review
- Key terms such as the total amount payable, the APR, or the balloon payment were not clearly explained
If any of these apply to your experience, it strengthens the case that your agreement was mis-sold. Our full guide to PCP mis-selling red flags covers every indicator in detail.
What Happens After You Check Your Eligibility?
If you meet the criteria above, the next step is straightforward. You submit your basic details through our online form, and our specialists take it from there. We locate your agreements, review them for evidence of hidden commission, and handle the entire complaint and negotiation process on your behalf. Everything runs on a No Win, No Fee basis.
For a full walkthrough of what happens at every stage, read our guide to the PCP claim process.
Start your free eligibility check today. It takes less than two minutes, involves only a soft credit check, and there is absolutely no obligation.
