Imagine buying your dream car, signing up for a shiny Personal Contract Purchase (PCP) deal, only to find out years later that you might have been mis-sold the finance agreement. Sounds shocking, right? Well, that’s exactly what’s happening across the UK right now. Experts are calling it the “PCP Big Bang” – a colossal £16 billion scandal of alleged mis-selling that’s shaking up the motor finance world. If you’ve ever financed a car through a PCP deal, this could affect you. So, are you active and prepared? Let’s break it down in simple terms, explore what’s going on, and figure out what you can do about it.
What’s the “PCP Big Bang” All About?
First things first, let’s clarify what PCP is. Personal Contract Purchase is a popular way to finance a car in the UK. You pay a deposit, followed by monthly instalments, and at the end of the term, you can either pay a lump sum (the “balloon payment”) to keep the car, hand it back, or trade it in for a new one. It’s flexible and affordable – or so it seemed.
However, the Financial Conduct Authority (FCA), the UK’s financial watchdog, has uncovered some serious issues. Many drivers were allegedly mis-sold these deals due to hidden commissions and unclear terms. Lenders and car dealers reportedly pocketed extra cash through commission structures without telling customers. As a result, you might have paid more than you should have – potentially a lot more.
The numbers are staggering. According to industry estimates, this could involve £16 billion in compensation claims, dwarfing even the PPI (Payment Protection Insurance) scandal of the early 2000s. With millions of PCP agreements signed over the years, this could be one of the biggest financial mis-selling cases the UK has ever seen.
Why Is This Happening Now?
So, why is this blowing up in 2025? The spark came from a landmark Court of Appeal ruling in late 2024, which found that some motor finance agreements broke consumer protection laws. The court decided that dealers acting as brokers had a duty to disclose commissions to customers – and many didn’t. This ruling opened the floodgates for claims.
On top of that, the FCA has been digging deeper. In December 2024, they urged the Supreme Court to fast-track a decision on whether to hear an appeal against this ruling, highlighting the urgency of the situation. They’re worried about the chaos it could cause in the car finance market if left unresolved.
Simply put, the stars have aligned: a key court decision, FCA action, and growing public awareness have created the perfect storm – the “PCP Big Bang.”
Are You Affected?
Now, you might be wondering, “Does this apply to me?” The answer depends on a few things. If you took out a PCP deal to buy a car (new or used) between, say, 2007 and early 2021, there’s a chance you could be eligible to claim. The FCA banned discretionary commission arrangements in 2021, so deals after that are less likely to be affected, but older ones are fair game.
Here’s a quick checklist to see if you might be involved:
- Did you finance a car through PCP?
- Was the agreement signed before January 2021?
- Were you told about commissions or fees the dealer might have earned?
- Did the terms feel unclear or confusing at the time?
If you’re nodding along to any of these, you could have a case. Don’t worry if you’re unsure – that’s where expert help comes in (more on that later).
How Much Compensation Can You Claim?
Let’s get to the big question: how much could you get back? Compensation depends on your specific case, but here’s a rough guide based on what’s being discussed in the industry:
- Interest Overpayments: If you paid extra due to hidden commissions, you could claim back the difference. This might range from a few hundred to several thousand pounds per deal.
- Average Payouts: Early estimates suggest average claims could be between £1,000 and £3,000 per person, though some could be higher if the car was expensive or the finance term was long.
- Total Pot: With £16 billion potentially up for grabs, even a small slice could make a difference.
For example, if you financed a £20,000 car and paid £5,000 in interest over three years, part of that might have been inflated by commissions. You could be entitled to a chunk of that back, plus interest on top (typically 8% per year, as per court guidelines). However, every case is unique, so getting a professional assessment is key.
Mis-sold Car Finance Claims Checker
Our mis-sold car finance claims calculator below estimates the level of compensation you may be able to reclaim for a mis-sold car finance agreement.
Add the value of your vehicle, the length of your agreement, and the interest rate you paid to the calculator below. Then, compare this against a rate that you may have been offered if you weren’t mis-sold.
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Disclaimer : The Mis-sold Car Finance Claims calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If you need more help and clear understanding.
*Please note: The PCP agreement covers the period from April 2007 to 28th January
Why Act Now?
You might be tempted to sit back and see how this plays out, but timing matters. The longer you wait, the harder it might be to gather evidence or meet deadlines. Plus, with millions potentially claiming, the compensation pot could get stretched thin. Acting early puts you ahead of the queue.
Moreover, the FCA’s investigation is ongoing, and a Supreme Court decision could change the game. If they rule in favour of consumers, claims could skyrocket – but firms might also start fighting harder to limit payouts. Getting your claim in now ensures you’re not left out in the cold.
Mis-sold Vehicle Finance Claims Checker
Our mis-sold car finance claims calculator below estimates the level of compensation you may be able to reclaim for a mis-sold car finance agreement.
Add the value of your vehicle, the length of your agreement, and the interest rate you paid to the calculator below. Then, compare this against a rate that you may have been offered if you weren’t mis-sold.
Mis-Sold Car Finance Claims Calculator
Estimated Compensation: £
Disclaimer : The Mis-sold Car Finance Claims calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If you need more help and clear understanding.
How National Claims Can Help
Navigating this mess on your own can feel like wading through treacle. That’s why National Claims is here. They’ll connect you with top-notch solicitors who know the ins and outs of PCP mis-selling. Whether it’s digging through paperwork, negotiating with lenders, or taking your case to court, they’ve got your back. Ready to start? Contact National Claims today and let them guide you to the compensation you deserve.
Final Thoughts
The “PCP Big Bang” is a wake-up call for UK drivers. With £16 billion of alleged mis-selling on the table, it’s a chance to right a wrong – but only if you act. Check your eligibility, crunch the numbers, and don’t hesitate to seek help. Whether it’s a few hundred quid or a few thousand, it’s your money, and you’re entitled to it.
So, are you active and prepared? The clock’s ticking – let’s get moving!
Contact National Claims today, and we will put you in touch with an expert solicitor who can guide you through the claims process.📞 Call us now free 0800 029 3849 or 📩 Submit an online enquiry to speak to our team. Your safety and well-being matter, and we’re here to help.
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