Over the past year, more people in the UK have been contacted about possible compensation linked to mis-sold PCP car finance agreements. Letters, emails, and even text messages are arriving with promises of payouts, often suggesting you could receive on average £830. It sounds appealing, especially during a time when many households are looking for extra financial support.
However, what is not always made clear upfront is that many of these offers come from claims management companies that charge a commission. This fee can be between 20% and 30% of your compensation. That means if you are awarded £800, you could lose up to £240 of it in fees.
This naturally raises an important question: do you actually need these companies, or can you make a claim yourself?
Understanding PCP finance claims
Personal Contract Purchase (PCP) agreements became extremely popular between 2007 and 2024. They allowed people to drive newer cars with lower monthly payments. However, investigations have suggested that many of these agreements may have been mis-sold.
In some cases, customers were not properly informed about commission structures or were given unclear information about interest rates. As a result, regulators have started looking more closely at how these deals were presented.
Recent data from the Financial Conduct Authority (FCA) suggests that the average UK household may have around 2.5 potentially mis-sold financial agreements during this period. This includes car finance deals, even for individuals who may no longer be alive, meaning families could still have grounds to investigate past agreements.
Why companies are contacting you about mis-sold car finance
Claims management companies are actively reaching out because they see an opportunity. With millions of PCP agreements in place over the years, even a small percentage of successful claims represents a large market.
These companies offer to handle the entire process for you. They gather your information, submit the claim, and communicate with lenders. For some people, this convenience is appealing, especially if they feel unsure about dealing with financial institutions.
But convenience comes at a cost, and that cost is the commission taken from any compensation you receive.
Can you do it yourself?
“The simple answer is yes, you can,” says Locksly.co.uk
“Making a claim yourself is entirely possible and, importantly, free,” they say.
“There are clear step-by-step guides available from trusted sources such as MoneySavingExpert, which explain exactly how to check if you were mis-sold and how to submit a complaint. The process usually involves contacting your lender, providing details of your agreement, and explaining why you believe it was mis-sold. While this may sound daunting, many people find it manageable once they begin. It may take a bit of time and organisation, but you keep 100% of any compensation awarded.”
The pros and cons of going solo
Doing it yourself means you avoid paying commission, which is the biggest advantage. You stay in control of your claim and can move at your own pace.
On the other hand, it does require some effort. You will need to gather documents, write emails or letters, and possibly follow up if you do not receive a response.
Using a claims company can reduce this workload. They handle the paperwork and may have experience dealing with lenders, which could slightly improve your chances of success. However, there is no guarantee of a better outcome, and you will always pay for their service if your claim succeeds.
Things to consider before deciding
Before choosing a route, it is worth taking some time to read up on your options. Understanding the process will help you decide whether you feel comfortable handling it yourself.
You should also check the terms of any claims company carefully. Some may charge fees even if your claim is unsuccessful, while others only take payment if you win.
Another important point is to look back at all your agreements, not just recent ones. Given the FCA’s findings, there is a possibility that multiple finance deals could be affected. This includes agreements taken out many years ago.
If a family member had a PCP agreement and has since passed away, it may still be possible to investigate whether compensation is due.
Leave no stone unturned
The rise in PCP finance claims means there is a real opportunity for people to recover money they may be owed. While the offers from claims companies can be tempting, it is important to understand the full picture.
You do not have to pay someone else to make a claim on your behalf. With the right guidance, you can do it yourself and keep the full amount of any compensation.
At the same time, there is no one-size-fits-all answer. Some people will prefer the ease of using a company, while others will choose to handle it independently.
The key is to stay informed, weigh up the costs and benefits, and make a decision that suits your situation.
