Did you buy a car, van, or motorcycle on Personal Contract Purchase (PCP) or Hire Purchase (HP) between April 6, 2007, and November 1, 2024? If so, you could be among the millions of people entitled to a refund, with an average payout of £830.
In this exclusive guide, we break down the latest updates regarding the Financial Conduct Authority (FCA) collective compensation scheme, and we show you exactly how to file your claim to reclaim your money.
In this guide:
What is the Car Finance Compensation Scheme?
Checklist: Am I Affected?
The Three Types of Mis-selling (How to spot if you were tricked)
How to File Your Claim (Don’t wait for them to contact you!)
<a id=”sec1″></a>What is the Car Finance Compensation Scheme?
The UK’s Financial Conduct Authority (FCA) has confirmed a major collective compensation plan. The goal is to rectify 12.1 million finance agreements that were sold using misleading practices. While the term “collective” implies companies should proactively reach out to you, experience shows that submitting a complaint yourself is the fastest and most reliable way to secure your payout.
<a id=”sec2″></a>Checklist: Am I Affected?
To see if you are eligible to claim, check if you meet these criteria:
Timing: The agreement was entered into between April 6, 2007, and November 1, 2024.
Vehicle: Cars, vans, motorcycles, or recreational vehicles (excluding towed caravans).
Finance Type: Personal Contract Purchase (PCP) or Hire Purchase (HP).
Status: You can claim even if you have fully paid off the loan, sold the vehicle, or even if the original account holder is deceased (claims can be made by the executor).
Exclusion: Interest-free (0% APR) deals are generally not covered by this scheme.
<a id=”sec3″></a>The Three Types of Mis-selling
There are three ways you might have been mis-sold a finance deal, all based on a lack of transparency:
1. Discretionary Commission Arrangements (DCAs): Where the interest rate was inflated to increase the dealer’s commission without your knowledge.
2. Contractual Links: Where you were misled into believing a broker was “searching the market” for the best deal, while they were actually exclusively tied to one lender.
3. Unfairly High Commission: Where the commission accounted for 39% or more of the total credit cost, combined with 10% or more of the loan value, making the deal inherently unfair.
<a id=”sec4″></a>How to File Your Claim Now
Don’t wait for a letter; due to changes in contact details, moving homes, or name changes, your notification might never reach you.
Our Advice: Use available online tools to generate a professional complaint letter, send it directly to your finance provider, and keep a record in your