Can I make a PCP claim if I bought a used car?
Yes, buying a used car doesn't stop you making a PCP claim. The FCA's redress scheme looks at how your finance was arranged and whether commission was properly explained, not whether the car was new.
Where the finance came from matters more than the car itself. PCP or HP finance arranged through a dealer between the 6th of April 2007 and 1st of November 2024 could be worth checking, but a private sale paid for with a personal loan usually works differently.
You can complain to your lender yourself for free, or Claim-Smart can help you work out who your lender was and check whether your agreement may be worth investigating.
A lot of the coverage around car finance claims makes it sound as though they're only about brand-new cars from big dealers. If you bought a second-hand car, you might assume none of this applies to you.
Luckily, that isn't how the FCA's motor finance redress scheme works. Plenty of used car buyers were offered PCP finance at the dealership, and the dealer arranging it could be paid commission by the lender in exactly the same way as on a new car.
Here, we explain why buying used doesn't count against you, when it can make a difference where you bought the car, and what you can do next.
Why doesn't it matter that the car was second-hand?
It doesn't matter because a PCP claim is about the finance agreement, not the car. The FCA's scheme covers both new and used vehicles, so a ten-year-old car financed through a dealer is looked at in the same way as a brand-new SUV.
When a dealer sets up your finance, they act as a broker, which means they introduce you to a lender. Lenders often paid dealers commission for doing this. Commission on its own isn't the problem, it’s actually very standard practice, the issue is whether the commission, or the way it worked, was properly explained to you.
The scheme mainly looks at three types of arrangement that may not have been properly disclosed:
Discretionary commission arrangements (DCAs), where the dealer could choose your interest rate within a range, and earned more commission the higher it set it.
High commission, where the commission was big compared with the loan.
Tied arrangements, where the dealer agreed to offer one lender's finance first, before looking at any others.
None of these depend on whether the car was new or used. Buying second-hand also doesn't make you more or less likely to be owed compensation. That comes down to what was in your agreement and what you were told at the time, which our guide on how to tell if you were mis-sold car finance explains in more detail.
If you've since sold or part-exchanged the car, that doesn't change anything either. You can read more in our guide on making a PCP claim if you no longer own the car.
Does it matter where I bought the used car?
It can do, yes. If a dealer arranged your PCP, you may be able to claim, but buying from a private seller works differently.
Buying from a franchised or main dealer
You may be able to claim, although if you bought the car from the brand’s own dealer, it may not count.
Many dealers offered finance from the manufacturer's own finance company, often called a captive lender. Sometimes the dealer was tied to that lender, which meant it had to offer that lender's finance first before looking anywhere else.
A tie that wasn't properly explained to you can also be treated as unfair under the scheme. There's an exception, though. If the lender can show there were clear, visible links between itself, the manufacturer and the dealer, like having the same branding on every document, the tie won't be seen as unfair. The idea is that a customer could have recognised the relationship even if nobody spelled it out.
Here's an example: say you bought a used car from a main dealer for that same brand, financed through the brand's own finance company, with the same logo on the showroom, website and paperwork. In that situation, the lender may argue the link was obvious enough that it didn't need explaining.
However, this only covers the tie. Your lender can still look separately at whether there was a discretionary commission arrangement or high commission that wasn't properly disclosed to you.
Buying from an independent dealer or car supermarket
You may be able to claim. Independent used car dealers and car supermarkets often arranged PCP through one or more lenders, and could be paid commission for doing so.
If that commission, or the way it was set, wasn't properly explained to you, your agreement could fall within the scheme.
Buying from a private seller
If you bought the car privately, it usually won't be a PCP claim. Private sellers can't arrange PCP finance, so most people in this situation paid with savings or a personal loan.
A personal loan that you arranged directly with your bank normally had no dealer or broker earning commission, and commission is what the scheme is about.
What if I don't know who my lender was?
Don't worry, this is pretty common, especially with used cars bought many years ago. Your lender is the finance company that lent you the money, not the dealer you bought the car from, and its name isn't always the one you remember.
You can usually track it down using:
Old bank statements
Your credit report, which normally shows agreements that have ended in the last six years
Emails, letters or paperwork from the dealer
The dealer itself, if it's still trading
If the dealer has closed down, that doesn't stop your agreement being looked at. Under the scheme, the lender is responsible for reviewing complaints, not the dealer.
Our guides on which lenders you can make a claim against and where to find the details to start a claim can help.
Does the age of the car or when I bought it matter?
The age of the car doesn't matter, but the date you took out the finance does. Your agreement needs to have started between the 6th of April 2007 and 1st of November 2024 to fall within the scheme.
As an example, a car that was already eight years old when you financed it in 2015 is treated no differently from one that was almost new. What counts is the 2015 finance agreement, not the car's registration date. Our guide on what year you needed to buy a car to be eligible goes into the dates in more detail.
A few types of agreement are left out of the scheme or treated as fair, and some of these can come up with used cars:
0% finance: Agreements where no interest was charged aren't covered.
Small commission amounts: Commission of £120 or less on agreements before the 1st of April 2014, or £150 or less from that date, is treated as fair.
Very big loans: Loans bigger than 99.5% of other loans taken out that year are excluded. But that only affects 0.5% of agreements.
So, can I make a PCP claim if I bought a used car?
Yes, if your PCP was arranged through a dealer or broker and started between the 6th of April 2007 and the 1st of November 2024, buying a used car rather than a new one doesn't count against you.
Where you bought the car can make a difference, especially if it was a private sale or finance from a main dealer. Not every agreement will turn out to be owed compensation either. But if you think you might be eligible for commission, it's worth asking the question.
You can complain to your lender yourself for free. If you'd like some support working out who your lender was, what your agreement included and what to do next, Claim-Smart can help.
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