Did you finance a car before 2021? Hidden commissions in car finance agreements may have led you to overpay unknowingly. If you took out PCP (Personal Contract Purchase) or HP (Hire Purchase) finance between 2007 and 2021, you could be entitled to claim back thousands in compensation.
Many car buyers were unaware that lenders paid commissions to dealers, influencing the interest rates they were charged. This unfair practice left consumers paying more than they should. If you suspect you were mis-sold PCP finance, follow this guide to file a claim and get your money back.
Step 1: Check If You Are Eligible
You may be eligible if you took out a PCP or HP finance agreement between 2007 and 2021. Hidden commissions often resulted in inflated interest rates, meaning you overpaid. If your lender or dealer did not fully disclose these commissions, you can file a claim.
To check eligibility, find your original finance agreement. Look for terms related to commission payments or interest rates. If you no longer have the paperwork, you can request a copy from your lender. PCP Claims experts can help you review your case at no cost.
Step 2: Use a Mis-Sold Car Finance Calculator
Before submitting a claim, it helps to estimate the compensation you might receive. A free Mis-sold Car Finance Payout Calculator can give you an idea of how much you could reclaim. These tools assess your finance agreement, interest rates, and potential overpayments.
Simply enter details like the finance provider, agreement start date, and monthly payments. The calculator will estimate the compensation based on similar cases. While the exact refund amount depends on lender investigations, it provides a useful starting point.
Step 3: Gather Essential Documents
To strengthen your claim, gather key documents related to your car finance agreement. These include:
- Finance agreement: This shows the loan amount, interest rate, and repayment terms.
- Bank statements: Evidence of payments made towards the agreement.
- Emails or letters: Any communication from the lender or dealer about the finance deal.
If you no longer have these documents, don’t worry. You can request copies from your lender, and they are legally required to provide them within 30 days.
Step 4: Contact Your Lender with a Complaint
Your first step in officially filing a claim is to write a formal complaint to your lender. Explain why you believe the finance agreement was mis-sold. Mention that you were not informed about commissions and how this affected your interest rates.
Be clear and include all supporting evidence. State that you expect a full refund of the overpaid interest plus any fees. If your lender acknowledges the claim, they may offer a settlement. If they reject it, you still have options.
Step 5: Escalate to the Financial Ombudsman
If your lender refuses to refund your money or ignores your complaint for more than eight weeks, escalate the case to the Financial Ombudsman Service (FOS). The Ombudsman reviews complaints and can order lenders to compensate customers if they find wrongdoing.
Submit your complaint online or via post. Include copies of all documents and correspondence with the lender. The FOS process is free, but it may take several months to reach a decision. However, successful cases often result in full refunds plus interest.
Step 6: Consider Legal Action (If Necessary)
If the Ombudsman rejects your case, you can take legal action against the lender. Some law firms specialise in mis-sold PCP finance claims and operate on a no-win, no-fee basis. Before proceeding, ensure you understand any legal costs involved.
In some cases, lenders settle before court proceedings to avoid legal fees. A solicitor can advise whether pursuing a court claim is the best course of action.
Step 7: Monitor Your Claim’s Progress
Once your claim is submitted, keep track of its progress. Lenders typically respond within eight weeks, but complex cases may take longer. If you escalate to the Ombudsman, expect the process to last several months.
Stay in contact with your lender or claims advisor and provide any additional information they request. If your claim is successful, expect a refund via bank transfer or cheque.
What Happens If You Win Your Claim?
If your claim is approved, you could receive compensation covering:
- Overpaid interest on the finance agreement.
- Additional fees or charges resulting from the mis-selling.
- 8% statutory interest added to your refund amount.
The compensation aims to put you back in the financial position you would have been in without the hidden commissions. Some claimants receive thousands of pounds, depending on the loan size and overpayment.
Final Thoughts
If you financed a car before 2021 and suspect unfair charges, don’t delay. Hidden commissions were common, and many drivers unknowingly overpaid on their PCP agreements. Filing a claim is free, and you could recover a significant amount.
Use the PCP Claims Mis-sold Car Finance Payout Calculator to check your potential refund today. The process is straightforward, and experts are available to help you every step of the way.
