If you financed a car through PCP or HP before 2021, you might have unknowingly overpaid. Many car finance agreements included hidden commissions that increased interest rates without the customer’s knowledge. The good news is that you may be entitled to claim back thousands in compensation.
What Is PCP Interest Overpayment?
Many drivers have unknowingly overpaid their car finance due to hidden commissions. PCP (Personal Contract Purchase) and HP (Hire Purchase) finance agreements often included discretionary commission arrangements. If you financed a car between 2007 and 2021, you may be entitled to claim a refund.
How Hidden Commissions Impacted Car Finance
Lenders and brokers added undisclosed commissions to finance agreements, inflating interest rates. Customers were unaware that brokers had a financial incentive to charge higher interest. The Financial Conduct Authority (FCA) found that many agreements led to unfair overpayments.
Can You Claim a Refund on Overpaid Interest?
If you took out PCP or HP finance before 2021, you could be owed thousands in compensation. Many agreements included commissions that increased borrowing costs without consumer knowledge. By making a claim, you may recover the extra interest you were charged unfairly.
FCA’s Latest Update on Motor Finance Claims
The FCA has extended the complaint-handling pause for motor finance firms until 4 December 2025. This means lenders have more time to process claims, but you should still act fast. Submitting a claim early ensures your case is reviewed as soon as possible.
How to Check If You Are Eligible for a Refund
You may qualify for a refund if:
- You financed a car through PCP or HP between 2007 and 2021.
- Your finance agreement included an undisclosed discretionary commission.
- Your interest rate was higher due to broker incentives.
Steps to Claim Your PCP Refund
- Gather Your Finance Documents – Locate your car finance agreement and review the terms.
- Check for Hidden Commissions – If the interest rate was influenced by commission, you may be eligible.
- Use the Mis-sold Car Finance Payout Calculator – PCP Claims offers a free tool to estimate your potential refund.
- Submit Your Claim – Contact a claims specialist or use an online claims portal.
What If You Don’t Have Your Finance Agreement?
You can still make a claim even if you no longer have your original documents. Many lenders can provide copies upon request. Claims specialists can also help retrieve necessary paperwork on your behalf.
How Much Could You Get Back?
The amount refunded depends on the interest overpaid due to hidden commissions. Some claimants have received thousands of pounds in compensation. Using a payout calculator gives an estimate based on your finance details.
Common Misconceptions About PCP Claims
Some drivers believe they cannot claim if they’ve finished paying for their car. However, claims can be made even if the agreement has ended. Others assume the claims process is costly, but many services operate on a no-win, no-fee basis.
Why You Should Act Now
Although the FCA has extended complaint handling deadlines, you should not delay. The earlier you submit a claim, the sooner your case will be processed. Waiting too long could reduce your chances of recovering overpaid interest.
Conclusion
Many car finance customers have unknowingly paid excessive interest due to hidden commissions. If you financed a car before 2021, you could be eligible for a refund. Check your eligibility and start your claim today through PCP Claims.
