PCP agreements with hidden commissions: In recent years, a major scandal has rocked the UK car finance industry, revealing widespread issues with undisclosed commissions and unclear terms in agreements.
If you have financed a vehicle through Personal Contract Purchase (PCP) or similar deals, you might be entitled to compensation.
This article explores the key aspects of this issue, helping you understand your rights and how to take action.
PCP agreements with hidden commissions have been at the heart of the UK’s car finance mis-selling controversy. These deals, popular for allowing consumers to drive new cars with management monthly payments, can involve dealerships or brokers receiving secret commissions from lenders. These can create conflicts of interest, as brokers could inflate interest rates to boost their earnings without informing buyers, leading to overpayments.
The problem stems from Discretionary Commission Arrangements (DCAs), which were banned by the Financial Conduct Authority (FCA) in January 2021. Before this, many car finance deals included such arrangements, affecting millions of agreements dating back to 2007.
A landmark Supreme Court ruling in August 2025 clarified that high, undisclosed commissions could indicate unfair practices under the Consumer Credit Act. Additionally, unclear finance terms, such as hidden fees, balloon payments, or misrepresented interest rates, compounded issues, potentially violating laws like the Consumer Rights Act 2015 that demand transparency and fairness.
If you entered into PCP agreements with hidden commissions before 28 January 2021, you may have unknowingly paid hundreds or even thousands more than necessary.
Determining if you are eligible for compensation starts with checking your finance agreement details. Primarily, if your deal was for a car, van, campervan, or motorbike used mainly for personal purposes (including commuting) and financed via PCP or Hire Purchase before 28 January 2021, you could qualify. Even if the finance is fully paid off, the vehicle was repossessed, claims are often still valid.
Key indicators of mis-selling include PCP agreements with hidden commissions where the broker did not disclose their earnings or the ability to vary interest rates. The FCA estimates that non-compliance affected a vast number of consumers, with potential redress covering overpayments plus interest.
Claiming compensation does not have to be complicated, but acting promptly is advised. Start by gathering your agreement documents or checking your credit report for details. If records are missing, contact your lender—they are required to keep them for several years.
When we lodge a complaint for you, we can focus on the lender rather than the dealer, highlighting issues like undisclosed commissions or unclear terms. For personalised guidance, professional legal support can be invaluable.
Your Lawyers specialises in these cases, offering a free initial assessment to review your PCP agreements with hidden commissions. Our experts can handle the process, from investigating your deal to negotiating with lenders, ensuring you recover what you are owed without upfront costs.
Do not miss out on potential compensation—millions have already been affected by these unfair practices. If you think your car finance involved PCP agreements with hidden commissions or unclear terms, contact Your Lawyers today for a free, no-obligation assessment.
Really need to know if you have a PCP Car Finance claim to make?
Use our claim tool above to find out if you are eligble for thousands of pounds in compensation!
Claim NowThe content of this post/page was considered accurate at the time of the original posting and/or at the time of any posted revision. The content of this page may, therefore, be out of date. The information contained within this page does not constitute legal advice. Any reliance you place on the information contained within this page is done so at your own risk.