Why are PCP claims taking so long?
- Claim-Smart Contributor
- 5 hours ago
- 5 min read
PCP claims are taking longer than people expected because the FCA's redress scheme is currently facing legal challenges from four separate parties.
On top of this, millions of finance agreements need to be reviewed by each lender, creating a backlog across the industry.
If you would like some extra support making your PCP claim, Claim-Smart can help.
If you've already submitted a PCP claim, you may be wondering why you haven't heard anything yet.
The truth is that many PCP and Hire Purchase claims are taking longer than expected to be processed, and it isn't because lenders have forgotten about them.
Instead, the delays are being caused by ongoing legal challenges to the FCA's motor finance redress scheme, alongside the huge number of complaints currently being investigated. While lenders are still preparing claims behind the scenes, the FCA has confirmed they do not currently have to calculate or pay compensation while the legal process continues.
If you're looking for a bit of extra support throughout the claims process, Claim-Smart can help. We can advise on whether you may be entitled to a PCP claim and guide you through from start to finish.
Why are PCP claims taking so long?
The biggest reason PCP claims are taking so long is that the FCA's redress scheme is currently being challenged in court.
A number of major motor finance lenders, including Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole are arguing that the scheme is unlawful and results in disproportionate pay-outs.
Also Consumer Voice is arguing the scheme does not go far enough.
Until these legal challenges are resolved, lenders have been told to continue preparing for the scheme by identifying affected customers, gathering historical records and reviewing agreements.
However, under the FCA's partial suspension, they do not currently have to calculate compensation or make compensation payments until the legal process has concluded.
As a result, many people who may be entitled to compensation will need to wait longer to hear the final outcome.
What are the legal challenges about?
The legal challenges argue that the FCA's plans for compensating customers need to be changed.
Some lenders believe parts of the redress scheme go too far, while others disagree with how compensation has been calculated.
At the same time, some consumer-led groups believe drivers should actually receive more compensation than the FCA has proposed.
Until the courts decide how the scheme should run, there is still a lot of uncertainty around exactly how compensation will be paid.
Are lenders allowed to delay responding?
Yes, The FCA has partially suspended parts of the compensation scheme while the legal challenges are ongoing.
This means lenders are still expected to look into complaints, identify eligible agreements and gather the information they need.
However, they do not currently have to calculate compensation or make compensation payments until the legal process is finalised.
Importantly, lenders have to tell customers if they are not entitled to compensation under the scheme.
The aim is to avoid lenders having to repeat work if the courts decide parts of the scheme need to change.
Why are older PCP agreements taking even longer?
A lot of PCP claims involve finance agreements that date back as far as April 2007.
In some cases, lenders need to find paperwork that is nearly 20 years old in order for them to review commission arrangements that were agreed back then.
Some of this information was historically held on paper, meaning it can take a lot longer to investigate these older agreements.
The older your finance agreement is, the longer it may take for a lender to complete its review.
Are there just too many claims for lenders to process?
The FCA have estimated that Around 12.1 million motor finance agreements (including PCP and HP deals) are eligible for compensation.
That means lenders, complaints teams and regulators are all dealing with a huge number of enquiries at the same time.
Even without the ongoing legal challenges, processing this volume of claims would take quite a bit of time. But combined with the court case, it has created a big backlog across the whole motor finance industry.
Should I still submit a PCP claim now?
Yes, it is still worth submitting your complaint as soon as possible if you think you may be entitled to compensation.
The FCA has told consumers to continue complaining to their lender rather than waiting for the legal process to finish.
Submitting your complaint now means your agreement can start moving through the process while the legal process is underway. If you leave it until later, you may find yourself joining an even longer queue.
If you need help submitting your PCP claim, Claim-Smart can help.
How long will PCP claims take to be paid out?
There is no set answer because it depends on the outcome of the legal challenges.
The Upper Tribunal is expected to hear the case in either December 2026 or February 2027, with a judgment expected afterwards.
If the FCA's scheme is upheld and there are no further appeals, the FCA expects compensation payments to start during 2027.
However, if the scheme is overturned, the FCA may need to redesign the compensation process or ask lenders to deal with complaints individually, which could delay some payments until 2028 or beyond.
Is there anything I should do while I wait?
For most people, the best thing to do is to just be patient.
If your finance agreement is still active, keep making your normal monthly payments unless your lender tells you otherwise.
It's also worth keeping any paperwork you have relating to your agreement, even if you have already submitted your complaint. If your lender needs extra information, responding quickly can help avoid further delays.
Waiting for a PCP claim decision
So, why are PCP claims taking so long?
The biggest reason is the ongoing legal challenges surrounding the FCA's compensation scheme and the partial suspension that has followed.
While lenders are still looking into claims and preparing for the scheme, most people who may be entitled to compensation will now have to wait until the legal process concludes before compensation can be paid out.
Although that can be frustrating, it doesn't necessarily mean there's anything wrong with your claim. If you think you may have been affected by undisclosed commission arrangements on a PCP or HP agreement, it is still worth starting the process.
You can complain directly to your lender for free, or you can speak to Claim-Smart if you would like support understanding your options and taking the next step.
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