Question 1

What is PCP car finance?

Accepted Answer

PCP (Personal Contract Purchase) is a type of car finance where you pay a deposit and monthly payments over a fixed term, with a large 'balloon payment' at the end if you want to own the car. It's one of the most popular ways to finance a vehicle in the UK.

Question 2

Why might my PCP finance have been mis-sold?

Accepted Answer

Your PCP finance may have been mis-sold if you were not told about Discretionary Commission Arrangements (DCAs). Under these arrangements, dealers could increase your interest rate to earn more commission, without disclosing this to you. The FCA banned DCAs in January 2021.

Question 3

What are Discretionary Commission Arrangements (DCAs)?

Accepted Answer

DCAs were agreements between car dealers and lenders that allowed dealers to set or influence the interest rate on your finance. The higher the rate they set, the more commission they received. This created a conflict of interest that was often not disclosed to consumers.

Question 4

What period does the FCA investigation cover?

Accepted Answer

The FCA's investigation focuses on motor finance agreements entered into between April 2007 and January 2021. If your finance falls within this period, you may be affected.

Question 5

How much compensation could I receive?

Accepted Answer

The FCA has estimated average compensation of around £830 per affected agreement, though individual amounts vary significantly based on factors such as the amount borrowed, the interest rate, and how long you had the agreement. We cannot guarantee any specific outcome.

Question 6

Does HP (Hire Purchase) finance qualify too?

Accepted Answer

Yes, HP (Hire Purchase) agreements are also covered by the FCA investigation. DCAs were used across various types of motor finance, including PCP, HP, and conditional sale agreements.

Question 7

Is there a deadline to make a claim?

Accepted Answer

The FCA has paused the deadline for motor finance complaints while their review is ongoing. However, it's advisable to have your case assessed early so you're prepared when the process is finalised.

Question 8

Do I need my original finance documents?

Accepted Answer

While original documents are helpful, they are not essential. Blue Lion Law can request the necessary information from lenders as part of the claims process.

Question 9

What if I've finished paying off my finance?

Accepted Answer

You may still be able to claim even if you have finished paying off your finance agreement or no longer own the vehicle. The claim relates to how the finance was sold, not your current situation.

Question 10

How long does the claims process take?

Accepted Answer

Timescales vary depending on the complexity of the case and the responsiveness of the parties involved. The FCA's ongoing review may also affect timelines. We will keep you informed throughout the process.

Question 11

What does 'no win, no fee' mean?

Accepted Answer

No win, no fee means that if your claim is unsuccessful, you won't be charged for our services. If your claim succeeds, our fee will be a percentage of the compensation recovered. Full terms will be provided before you proceed.

Question 12

Can I claim for GAP insurance as well?

Accepted Answer

Yes, GAP insurance sold alongside your car finance may also have been mis-sold. The FCA has separate concerns about the GAP insurance market, including high commission rates and poor value for money. We can assess both types of claim.

PCP Claims FAQ

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