Financing a car feels straightforward. You choose a car, sign the paperwork and drive away. For many UK drivers, it has become as routine as arranging insurance. Yet a quiet problem has grown in the background and it is now reshaping the car finance industry. Mis-sold PCP deals sit at the centre of that change.
Over the last twenty years, Personal Contract Purchase (PCP) has become one of the most popular ways to get a car. Lower monthly payments and flexible choices at the end made it an easy yes for millions. Many people are now learning that the information they were given at the time was not always complete.
As concerns grow, thousands of people have raised PCP claims to highlight how these agreements were sold. While no compensation has been awarded yet, the investigations are shining a light on unfair practices and prompting major change within the industry.
PCP in plain English
A PCP agreement lets you pay for a car monthly over a set term. When you reach the end, you can return the car, pay a large final amount to keep it, or use any value left in the car towards another deal. On paper, this looks simple. In reality, some costs and conditions are easy to miss at the start.
Common pitfalls people discover later
- A large final balloon payment that was not fully explained.
- Strict mileage limits with costly penalties if you go over.
- Wear and tear charges, even when you return the car in good condition.
- Terms that favour the lender rather than the customer.
- Sales commissions that may have changed the interest rate you were offered.
Many drivers only notice these issues at the end of the agreement or when unexpected fees appear.
What counts as mis-selling?
Car finance mis-selling happens when key information is missing, unclear or presented in a way that misleads you. It could mean you were rushed, important costs were glossed over, or a commission affected your deal and no one told you.
You may have been mis-sold if any of these sound familiar:
- No one told you a commission affected your finance rate.
- Interest and charges were not explained clearly.
- You felt pressure to sign on the day.
- Optional extras such as insurance or servicing appeared without clear consent.
- You were not given clear end-of-deal options in writing.
If your PCP was agreed between 2007 and 2021 and you did not receive clear and complete information, you may be able to explore a PCP claim. This period has attracted close regulatory attention because of concerns about widespread mis-selling.
How the industry is changing
The rise in car finance claims has pushed lenders, brokers and dealerships to improve how they sell. You should now see:
- Plain-language contracts that are easier to follow.
- Clear disclosure of commissions and incentives.
- Stronger oversight from regulators.
- A shift towards customer-first sales practices.
These changes are not just about ticking boxes. They are about rebuilding trust so drivers know exactly what they are signing.
What this means for you
Whether you are looking at a new deal or checking an old one, a little groundwork goes a long way.
Protect yourself with these steps:
- Ask directly if a commission affects your rate. Get the answer in writing.
- Take your time and read everything, including small print.
- Request a full breakdown of costs and any optional extras.
- Make sure you understand end-of-term choices and any fees.
- Keep records of emails, texts and paperwork.
Red flags when comparing deals
- Contracts packed with jargon or unclear wording.
- Pressure to sign now or lose the deal.
- Vague or missing details on fees, interest or mileage limits.
- No written summary of key terms.
- References to add-ons you did not ask for.
Spotting these early can save you money and stress later.
Already signed a PCP? You still have options
If something does not feel right, you can still act. Many people only spot problems years after signing. A clear, independent review of the paperwork often helps.
You may be able to make a car finance claim if:
- A commission influenced your deal and was not disclosed.
- Balloon payments or mileage limits were not clearly explained.
- You were pressured to sign quickly.
- Fees or penalties appeared that were never mentioned upfront.
You may still be eligible even if you no longer have the car, as long as the agreement was between 2007 and 2021.
The road ahead
The car finance market is changing because drivers spoke up. The growth in PCP claims has exposed poor practice and encouraged clearer, more honest conversations. As more car finance claims are investigated, one message stands out. Transparency matters.
Your best protection is knowledge. Take your time. Ask questions. Keep everything in writing. The monthly payment is only part of the story. The real cost often sits in the details.
If you think you were misled, you are not on your own. Support is available, and with better rules and greater accountability, fair and transparent car finance is within reach for everyone.