PCP Claims — Mis-Sold PCP Car Finance Compensation (2026)
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
If you took out a Personal Contract Purchase (PCP) agreement between 6 April 2007 and 1 November 2024, you may be entitled to compensation under the FCA confirmed motor finance redress scheme (PS26/3, 30 March 2026). PCP is the most commonly mis-sold form of car finance in the UK. Average payout: £829 per agreement.
In this guide
- What Is a PCP Agreement?
- ℹ Why PCP Was Particularly Vulnerable to Mis-Selling
- Are PCP Agreements Covered by PS26/3?
- The Three Grounds for a PCP Claim
- How Much Could Your PCP Claim Be Worth?
- PCP Claim Timetable
- How to Make Your PCP Claim
- PCP-Specific Situations
- Find Your PCP Lender
- Frequently Asked Questions
- Our Partner's Fees Explained
- Think You May Have a Motor Finance Claim?
What Is a PCP Agreement?
Personal Contract Purchase (PCP) is a form of car finance where you pay a deposit, make fixed monthly payments over an agreed term (typically 2–4 years), and at the end of the term choose between three options:
- Return the vehicle to the dealer with nothing more to pay (subject to mileage and condition)
- Pay a final ‘balloon payment’ (the Guaranteed Minimum Future Value) to own the vehicle outright
- Part-exchange the vehicle and use any equity as a deposit on a new PCP deal
PCP became the dominant car finance product in the UK from around 2012 onwards. By 2019, PCP accounted for approximately 80% of all new car finance agreements. The combination of lower monthly payments, flexible end-of-term options and the ease of upgrading to a new vehicle made PCP attractive — but it also made it easier for dealers to obscure the true cost and embed hidden commissions.
ℹ Why PCP Was Particularly Vulnerable to Mis-Selling
PCP is structurally more complex than HP. The balloon payment, mileage limits, condition requirements and three end-of-term options gave dealers more opportunities to obscure the true total cost.
The monthly payment focus — rather than total cost focus — made it easy for dealers to hide a higher interest rate behind an apparently affordable monthly figure.
The FCA’s own research found that PCP agreements had higher DCA rates than HP agreements on average.
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Are PCP Agreements Covered by PS26/3?
Yes. PS26/3 explicitly covers Personal Contract Purchase agreements as a primary product type. All regulated PCP agreements arranged through FCA-regulated lenders between 6 April 2007 and 1 November 2024 are within scope, regardless of:
- Whether the vehicle was new or used
- Whether the agreement has been settled, is still live, or ended years ago
- Whether you returned the vehicle, paid the balloon, or part-exchanged
- Whether you still have the paperwork
- Whether you have since sold the car
- Whether the dealership is still open
How PCP Mis-Selling Worked
The Discretionary Commission Arrangement (DCA) Problem
Under a DCA, your dealer had the power to set your PCP interest rate within a range set by the lender. The higher they pushed the rate, the more commission they earned. This created a direct conflict of interest — the dealer was supposed to be helping you find the best deal, but earned more money by giving you a worse one.
On a typical PCP agreement of £15,000 over 4 years, the difference between the lowest and highest rate the dealer could set was often 3–5 percentage points. At the higher rate, the customer paid hundreds to thousands of pounds more in interest — all of which went to the dealer as additional commission.
Full explanation: What Is a DCA?
How the Balloon Payment Made It Worse
PCP’s balloon payment structure made DCA mis-selling particularly damaging. When a dealer raised your interest rate to earn more commission, the total cost of credit increased — but the monthly payment could be kept artificially low by inflating the balloon payment. This meant customers often had no idea the interest rate had been pushed higher, because the monthly payment appeared reasonable.
The balloon payment also created an additional incentive for dealers: a higher loan amount meant more commission regardless of the interest rate. Dealers had an incentive to encourage customers to borrow more than they needed — for accessories, paint protection or extended warranties — because it increased the commission base.
The Mileage Limit Pressure
PCP mileage limits were frequently used as a sales technique rather than explained as a genuine contractual obligation. Customers who exceeded their mileage limit faced significant excess mileage charges at the end of the term. In some cases, the fear of these charges was used by dealers to encourage customers into a new PCP deal before the end of their current term — generating another commission event.
The Three Grounds for a PCP Claim
1. Discretionary Commission Arrangements (DCAs)
The primary ground for most PCP claims. If your agreement was before 28 January 2021, the dealer may well have had the power to vary your rate — the FCA found these arrangements were widespread. Where this was not disclosed, you are eligible for compensation. The FCA’s own research confirmed DCA rates on PCP agreements were among the highest of any product type.
2. Unfairly High Fixed Commission
For PCP agreements after January 2021 — and for pre-2021 agreements where the DCA rate was not used — if the fixed commission met the threshold of 39% of total cost of credit and 10% of the loan amount, it is compensable under PS26/3.
3. The Johnson Remedy — High-Value PCP Cases
Where commission was at least 50% of the total cost of credit and 22.5% of the loan amount, full commission repayment applies rather than the hybrid remedy. Given the higher loan values involved in premium PCP agreements — particularly for brands like Audi, BMW, Mercedes, Porsche and Range Rover — the Johnson Remedy applies more frequently to PCP than to HP.
See: The Johnson Remedy Explained
How Much Could Your PCP Claim Be Worth?
The FCA confirmed average payout is £829 per eligible agreement. For PCP agreements, the calculation uses the hybrid remedy:
- Step 1: Calculate the estimated interest overpayment using a 17% APR adjustment (post-April 2014) or 21% APR adjustment (pre-April 2014)
- Step 2: Calculate the commission paid to the dealer
- Step 3: Take the average of Step 1 and Step 2
- Step 4: Add compensatory interest at Bank of England base rate plus 1% (minimum 3%) from the date of each overpayment
ℹ PCP vs HP Payout Comparison
PCP agreements often produce higher payouts than HP agreements on the same vehicle because:
- PCP loan amounts are typically higher (the balloon payment means lower monthly payments, so customers often finance more)
- PCP interest rates were pushed higher by DCAs more aggressively because the monthly payment remained affordable
- The longer eligible interest period on older PCP agreements produces more compensatory interest
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→ Use our PS26/3 Calculator to estimate your specific PCP payout
PCP Claim Timetable
| Scheme 2 (post-April 2014) | Scheme 1 (pre-April 2014) | |
|---|---|---|
| Agreement dates | 1 Apr 2014 – 1 Nov 2024 | 6 Apr 2007 – 31 Mar 2014 |
| Complaint deadline | 30 June 2026 | 31 August 2026 |
| Determination by | 30 September 2026 | 30 November 2026 |
| Payment by | November 2026 | January 2027 |
Original timetable, set before the 2 July 2026 suspension — these dates no longer apply as stated. | APR adjustment | 17% | 21% (higher = larger payout) |
Full explanation: Scheme 1 vs Scheme 2 — What’s the Difference?
How to Make Your PCP Claim
The process is the same as any car finance claim. You submit a complaint to the lender who provided your PCP agreement — not the dealer. Find your lender in your original agreement or on your credit report. Use the FCA’s lender list at fca.org.uk/consumers/car-finance-complaints/list-lenders for current complaint contact details.
Include in your complaint:
- Your full name and date of birth
- Your address at the time of the PCP agreement
- The vehicle make, model and registration number
- The approximate PCP agreement start date
- A statement that you are complaining about undisclosed commission arrangements under PS26/3
No paperwork? See: Claiming Without Paperwork
PCP-Specific Situations
I Returned the Vehicle at the End of My PCP — Can I Still Claim?
I Paid the Balloon Payment and Own the Car — Can I Claim?
I Part-Exchanged My PCP Vehicle — Can I Claim on the Old Agreement?
My PCP Vehicle Was Written Off — Can I Claim?
I Had Multiple PCP Agreements Over the Years
I Had a PCP Agreement and an HP Agreement — Can I Claim for Both?
Find Your PCP Lender
PCP agreements were provided by all major car finance lenders. Find your lender below:
Black Horse PCP Claims (Lloyds Banking Group)
Santander Consumer Finance PCP Claims
Volkswagen Financial Services PCP Claims (VW, Audi, SEAT, Skoda, Porsche, CUPRA)
BMW Financial Services PCP Claims
Mercedes-Benz Financial Services PCP Claims
Ford Credit PCP Claims (FCE Bank)
Close Brothers Motor Finance PCP Claims
Stellantis Financial Services PCP Claims (Peugeot, Citroën, Vauxhall, Fiat, Alfa Romeo, Jeep)
Barclays Partner Finance PCP Claims
Full lender list: Car Finance Claims Hub
Frequently Asked Questions
I returned my PCP vehicle at the end of the term. Can I still claim?
Yes. The claim relates to the commission arrangement on the original agreement, not what you did with the vehicle at the end of the term. Returning the vehicle does not affect your eligibility.
I paid the balloon payment and own the car. Can I claim?
Yes. Whether you returned the car, paid the balloon or part-exchanged it, the claim relates to the commission on the original agreement. What happened at the end of the term is irrelevant.
My PCP ended years ago. Can I still claim?
Yes. The scheme covers agreements back to April 2007. Older agreements actually produce larger compensatory interest payments because interest accrues from the date of each overpayment.
I am currently in a PCP agreement. Can I claim on it?
Yes. You can submit your complaint while the agreement is still live. This does not affect your ongoing agreement or your obligations under it.
Does making a PCP claim cancel my agreement?
No. Submitting a PS26/3 complaint does not cancel or affect your current finance agreement. The claim is entirely separate from your ongoing payment obligations.
I had four PCP agreements over ten years. Can I claim for all?
Yes. Each eligible agreement is a separate claim with a separate potential payout. See: Multiple Car Finance Agreements
My PCP was arranged online, not at a dealership. Am I covered?
If the agreement was arranged through an FCA-regulated broker or lender and met the criteria (PCP, between April 2007 and November 2024, personal name), it is within PS26/3 regardless of whether it was arranged online or in person.
I had bad credit and my PCP rate was high. Does that mean I cannot claim?
No. Your credit history does not affect eligibility. See: Bad Credit Car Finance Claim
Don’t Miss the PCP Deadline — 30 June 2026
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Related Pages
What is Mercedes Agility Finance and is it covered?
Mercedes Agility Finance is Mercedes-Benz Financial Services’ PCP product. If your agreement was described as Agility Finance, it was a PCP agreement through MBFS — and it is covered by the FCA redress scheme, provided it meets the standard eligibility criteria (PCP or HP, April 2007 to November 2024, personal use).
Why did Mercedes-Benz Financial Services post a £365 million loss?
Mercedes-Benz Financial Services UK took a £395 million charge in its 2024 accounts to cover potential motor finance redress costs — on top of £28.8 million already provisioned. The combined £424 million provision was larger than the company’s profits, resulting in a £365 million annual loss. This is a direct consequence of the FCA motor finance mis-selling scandal.
Does the contractual ties exclusion affect my Mercedes claim?
It may affect the contractual ties ground specifically, because the FCA scheme excludes contractual tie claims where there are visible links between the lender, manufacturer and franchised dealer — which clearly applies to Mercedes. However, DCA and unfairly high commission claims are not affected by this exclusion and remain fully valid. These are the stronger grounds for most Mercedes customers.
Can I claim for a Mercedes van financed through MBFS?
Yes. The FCA scheme covers vans as well as cars, provided the finance was PCP or HP for personal use (or as a sole trader with a loan under £25,000). If you financed a Mercedes Sprinter, Vito or other van through MBFS between April 2007 and November 2024, your agreement is within scope.
Can I claim for a Smart car financed through Mercedes-Benz Financial Services?
Yes. Smart cars were financed through Mercedes-Benz Financial Services during the eligible period. If you financed a Smart ForTwo or ForFour through MBFS between April 2007 and November 2024, your agreement falls within the FCA scheme scope.
How much could I receive from a Mercedes car finance claim?
The FCA estimates the average payout is £829 per agreement. For Mercedes customers, premium vehicle loan amounts typically exceed the industry average — meaning potential compensation may be above average. On a £30,000+ Mercedes agreement with an inflated interest rate, compensation could be significantly higher than the industry average.
I don't have my Mercedes Agility Finance paperwork. Can I still claim?
Yes. Claims Bible can trace your MBFS agreements using a credit reference check, going back as far as 2007. No original paperwork is needed.
What is the deadline to make a Mercedes claim?
31 August 2027 is the final deadline. Complaining before 30 June 2026 (post-2014 agreements) or 31 August 2026 (pre-2014 agreements) placed you in the priority group under the original timetable. Those dates are suspended, but a complaint made now is still logged and queued if the scheme resumes.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
