Why are people getting refunds for PCP car finance?
- Claim-Smart Contributor
- Apr 15
- 4 min read
People are getting refunds for PCP car finance because, between April 2007 and November 2024, some lenders were mis-selling car finance and were earning more commission than they should have - at the customer's expense.
On 30th March 2026, the Financial Conduct Authority announced the final rules for its formal redress scheme, estimated to provide compensation for over 12.1 million exploited car finance agreements.
The FCA has aimed to make the claims process as simple as possible, and it can be done alone.
But missing paperwork, out-of-business lenders and other obstacles could make navigating the system unexpectedly challenging.
This is where Claim-Smart can provide a supportive, professional helping hand to guide you through the process from start to finish.
Plus, as we operate on a no-win, no-fee basis*, you only cover our fees if you get the compensation you deserve.
To start your claim today, get in touch.
What is PCP car finance?
PCP car finance stands for Personal Contract Purchase. This is when you pay for your car in monthly instalments with the option to purchase the car at the end of the agreement.
This type of agreement has always been widely used and, between 2007-2024, widely abused.
This was a result of undisclosed commission structures pushing up the interest rates for customers.
Most commonly, Discretionary Commission Arrangements (DCAs) allowed car dealers to set their own interest rate, regardless of what the lender provided, and pocket the difference.
These were officially banned in 2021 when the FCA stepped in and began to regulate the payment plans.
It’s important to note that the FCA redress scheme covers both Personal Contract Purchase (PCP) and Hire Purchase (HP) finance plans.
Has anyone had a successful PCP car finance claim?
Yes, and now millions more customers are expected to. As the FCA has now announced its final plan for the redress scheme, customers have switched from asking ‘if’ they’ll get compensated to asking ‘when’.
Prior to the FCA announcing its redress scheme - due to start handing compensation out this year - customers had previously complained and pursued claims through the Financial Ombudsman Service (FOS).
This is the independent body that resolves disputes between financial firms and customers.
Now, through the redress scheme, it’s estimated that around 12.1 million agreements will be eligible for compensation. With an average payout of £829 for each one.
Successfully claiming for mis-sold car finance is not complicated. The FCA has purposefully made it a relatively simple process so claimants can do it by themselves, and fast.
But it can be time consuming and confusing, and a claims management company such as Claim-Smart could help take that responsibility and frustration off your plate.
Our expert team specialise in guiding customers through the claims process, from tracking down old paperwork to supporting you through lender disputes.
Am I entitled to a PCP refund?
You might be entitled to a PCP refund, if your car finance agreement meets the qualifying criteria:
You must have taken out a PCP or HP agreement between 6th April 2007 and 1st November 2024.
There must be a DCA or a commission structure that wasn’t properly disclosed to you.
The value of the loan matters - the redress scheme is designed for mass-market customers, so high-value loans are not covered.
It’s important to note that if you took out multiple agreements within the affected time period, you may be entitled to compensation for every affected agreement, though you’ll have to make separate claims for each one.
Also, if you don’t have the original documentation, it doesn’t matter. Lenders will have the records and, as part of the scheme, are required to reach out to all customers they consider affected.
When will car finance claims be paid?
Payments for car finance claims are due to start being distributed before the end of 2026, so if you think you’re entitled to compensation, it’s time to make your claim.
When you receive your compensation is also decided by which scheme you fall into. The FCA have split the redress scheme in two based on the age of the agreement and introduced claim application deadlines for each:
Scheme 1
For agreements taken out between 6 April 2007 and 31 March 2014. Lenders have a three month implementation period from 30 March 2026.
If you put your claim in before the end of this period - 31st August 2026 - lenders are required to respond before the end of November 2026. Payments are then due early 2027.
Scheme 2
For agreements taken out between 1 April 2014 and 1 November 2024. Lenders have a five month implementation period for this scheme, ending 30th June 2026.
If you put your claim in before this date, lenders are required to respond by 30th September 2026 with payments due before the end of November 2026.
Essentially, the sooner you make your claim, the better. And customers who have already complained will be top of the list to receive their compensation sooner.
If you don’t complain before the deadline, don’t worry. Lenders are required to reach out to all customers they believe were affected. But this is the last resort, and these customers will be the last to receive their compensation.
How Claim-Smart helps people get a refund for PCP car finance
While the FCA is clear that people don’t need a claims management company to make a car finance claim, the process can prove complex.
When there are multiple agreements, old records, or lender disputes, having the professional guidance and support of a company like Claim-Smart can relieve the stress of making your claim and help you navigate it with ease.
Plus, we’re completely transparent on our fees - operating on a no-win, no-fee basis*, or if you use our services but then change your mind.
From initial eligibility check to final payout, we help customers get the compensation they deserve.
* Please see our terms and conditions for our fee structure and cancellation terms.
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