For any motorists who purchased a car using PCP car finance in the UK during 2007 to 2024, they could be eligible for compensation, even if they moved abroad, have paid off the agreement in full and no longer own the car.
Where the driver lives in the present day is not relevant, since the eligibility is based who the finance was taken out with and if hidden commissions were arranged without knowledge.
The Financial Conduct Authority (FCA) says its motor finance redress scheme covers eligible agreements made between 6 April 2007 and 1 November 2024.
Can Drivers get a PCP refund if they now live in Dubai?
Even though someone may live in Dubai now, it does not mean that they cannot claim for a vehicle that was bought in the UK as long as 20 years ago.
For example, the customer may have purchased a car from a UK dealer while living in the UK, took out finance with a UK lender and then later moved to Dubai for work or family reasons.
The same can apply for those that have moved to another country like Spain or the US.
The current address is not the only thing that matters when assessing an old finance agreement. Drivers can still make a PCP claim if they no longer own the vehicle and have had several vehicles since.
Which car finance companies could motorists claim from?
A number of well-known finance companies have provided car finance through UK dealerships and these are the companies that could pay out compensation if they charged hidden commission. This includes lenders such as Close Brothers, Black Horse, MoneyBarn, Stellantis Financial Services, Audi, BMW, Mercedes and Volkswagen Financial Services, among others.
If a driver used finance from one of these providers, it may be worth checking any old agreement and submitting it to a claims management company or directly to the lender to see if it could be eligible for a claim.
The FCA says around 12.1 million agreements are estimated to be eligible for compensation under its current scheme. The FCA estimates average compensation at around ยฃ830 per agreement, although the actual amount will vary from person to person.
Why are people making car finance claims?
The claims relate to the way commission arrangements between car dealers and finance companies were handled and disclosed.
In some cases, customers were not properly told about important arrangements between the finance providers and car dealers, with the latter often receiving a nice payday over a hidden commission.
In fact, the arrangement could allow a broker (car dealer) to influence the interest rate offered to a customer, potentially increasing the commission they received. The FCA banned these arrangements in January 2021.
The FCA has since introduced an official redress scheme for customers who were treated unfairly. Thousands of claims have been paid out already, with many more to follow.
Can customers receive more than the average compensation?
Yes. whilst the ยฃ829 figure is an average refund, is it made up of the hidden commission and interest. If a customer purchased an expensive vehicle or the dealer charged even more than they should have, the amount in compensation could be higher.
The FCA says that, in the most serious cases, customers could receive the commission paid plus interest. However, compensation will vary and some cases will be subject to limits under the scheme.
Do drivers need old paperwork to be eligible for PCP reclaim?
Yes, having the original finance agreement can make the process easier, but one can still trace an old agreement if they no longer have the paperwork, by going through old bank statements or confirming the name of the car dealer, finance company and vehicle registration that you used.
For customers that live abroad, a claims management company may also be able to help identify an old agreement and deal with the complaint on a customerโs behalf.
However, potential claimants do not have to use a claims management company. The FCA provides free information and tools for people who want to complain directly. Some claims companies may charge more than 30% of any compensation received.
Is it possible to make a claim now?
Yes, with the deadline potentially looming in August 2027 (and subject to change), it is possible to make a claim by visiting the website of the original car finance provider and following the procedures.
So, for those living in Dubai, Spain, Australia or elsewhere, being outside the UK does not automatically mean they have lost the opportunity to look into a potential car finance claim.
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