Personal Contract Purchase (PCP) car finance agreements have been widely mis-sold in the UK. Many drivers were not fully informed about commission fees, interest rates, and the total cost of their agreements. If you were affected, you may be entitled to compensation. A PCP claims calculator can help estimate how much you could recover based on your contract details.
Why PCP Claims Are Rising in the UK
PCP agreements have become the most popular way to finance a car in the UK. In 2022 alone, over 80% of new cars were purchased through finance agreements, with PCP being the most common option. However, concerns over hidden commissions and misleading terms have led to a surge in claims. The Financial Conduct Authority (FCA) is investigating whether lenders unfairly charged customers without proper disclosure.
How Much Compensation Could You Receive?
The amount you can claim depends on several factors, including how much interest you paid and whether commissions were hidden. The average compensation payout ranges between £1,000 and £5,000, though some cases exceed this amount. If you suspect your lender misled you, it’s crucial to check your contract and seek expert advice.
How to Use a PCP Claims Calculator
A PCP claims calculator estimates potential compensation based on your finance agreement. To get an accurate figure, you need:
- The amount borrowed for the vehicle
- Monthly payments and total interest paid
- The final balloon payment (if applicable)
- Whether a commission was included without your knowledge
Once you enter this information, the calculator provides an estimated refund amount. Keep in mind, this is just an estimate, and professional assessment is needed for a precise claim.
Who Can Make a PCP Claim?
If you took out a PCP agreement between 2014 and 2022, you might be eligible for compensation. You could have a valid claim if:
- The lender did not disclose commissions to you
- You were charged excessive interest rates without a clear explanation
- You were not given proper advice on the full cost of your finance deal
Many claims arise from brokers and dealers failing to explain how they benefited from hidden commission structures. If this applies to you, start your claim as soon as possible.
What Evidence Do You Need?
To support your claim, gather the following documents:
- Your original PCP agreement
- Proof of payments made over the term
- Any correspondence with the lender or dealership
- A breakdown of interest rates and charges
If you no longer have these documents, you can request copies from your finance provider. Lenders must provide this information under UK consumer law.
What Happens After You Submit a PCP Claim?
Once you submit your claim, the lender will review the evidence. If they accept wrongdoing, they may offer a settlement. If they reject the claim, you can escalate it to the Financial Ombudsman Service (FOS) for an independent review. The FOS has ruled in favour of many customers, forcing lenders to refund unfair charges.
Should You Use a Claims Management Company?
You can claim compensation yourself for free, but some people prefer to use claims management companies (CMCs). These firms handle the entire process but take a percentage of your refund. If you choose to go this route, ensure they are regulated by the FCA to avoid scams.
Time Limits for Making a PCP Claim
There are strict deadlines for submitting a claim. Generally, you have six years from the date of the agreement or three years from when you first realised you were mis-sold. If you miss this window, you may lose your right to compensation.
Final Thoughts
If you suspect you overpaid due to hidden charges, checking your eligibility for a claim is crucial. Use a PCP claims calculator to get an estimate and gather your paperwork. Whether you claim independently or use professional help, taking action now could help you recover thousands in compensation.
