Good News for Drivers as There Is Still Time to Make a PCP Claim

A legal battle is playing out in the English courts. The redress framework designed by the FCA to compensate drivers who were mis-sold car finance agreements between 6 April 2007 and 1 November 2024 has been challenged by lenders and Consumer Voice. As a result, parts of the scheme have now been suspended while the legal process continues.

In simple terms, parts of the timetable have been paused while the legal process continues. Lenders currently have extra time before they need to calculate or pay compensation under the scheme.

For drivers, this may sound frustrating. Many people were hoping for a quick answer. However, there is also a positive side. If you have had Personal Contract Purchase or another type of motor finance and have yet to make a mis-sold PCP claim, there is still time to look into it.

What is the motor finance redress scheme?

The FCA has been looking into motor finance agreements because some drivers may have been treated unfairly when buying a car, van or motorbike on credit.

The issue is linked to commission arrangements between lenders and brokers, including some car dealerships. In some cases, the way these contracts worked may have encouraged higher interest rates, with customers left in the dark about how the deal was being arranged.

The FCA’s redress programme was created to give affected drivers a clearer route to compensation. Rather than expecting every customer to fight a separate case, the scheme set out rules for lenders to follow when reviewing agreements and deciding whether money is owed.

The FCA has said that an industry-wide scheme is the quickest and most cost-effective way to deal with such a widespread problem. However, the Upper Tribunal has now suspended parts of it while the case moves through the courts.

What does the pause mean for drivers?

The pause does not mean the issue has gone away. It means parts of the timetable have been delayed while the legal challenges are considered.

For lenders, this gives extra time before they need to calculate or pay compensation under the scheme. 

The FCA has said that firms must still comply with parts of the scheme that have not been suspended. It has also made clear that consumers can still complain directly to their lender.

The scheme may be moving slowly, but this pause gives drivers a practical window to check old agreements, find missing paperwork, and decide whether they should make a claim.

How can someone make a PCP claim?

There are two main routes.

The first route is to complain directly to the credit companies. This is free. The FCA provides information for consumers and has a list of lenders to help people find the right contact details. A direct complaint usually means telling the loan provider that you are concerned your motor finance agreement may have been affected by unfair commission arrangements and asking them to review it.

The second route is to use a claims firm. This is optional. Some drivers prefer this because they want help checking old agreements, identifying lenders, preparing the complaint, and keeping track of the process.

This can be particularly useful where someone has had several cars on finance, has moved address, has limited paperwork, or feels unsure about how to word the complaint. A claims firm can help gather the details, submit the claim, and manage updates as the process develops.

There is a trade-off. Claims firms usually charge a fee if compensation is recovered. For some people, the convenience and support are worth it. For others, the free direct route will feel like the better option.

What information helps with a claim?

You do not need every document before you start, but the more details you can gather, the easier the process usually becomes.

Useful information may include the lender’s name, the dealership where you bought the car, the vehicle registration, the approximate date of the agreement, your address at the time, old payment references, bank statements showing monthly finance payments, and any emails or letters connected to the purchase.

It is also worth checking your credit file if you cannot remember the lender. Old finance accounts may still appear there, even where the agreement has long since ended.

If you have had several cars on finance, each agreement may need to be checked separately. An old family car, a vehicle used for commuting, or one that has already been sold could still fall within the relevant period.

The takeaway for drivers

The FCA’s motor finance redress scheme has been partially suspended, which means the process has slowed while legal challenges are dealt with. For those who have yet to make a PCP claim, this feels like a second chance. 

You can complain directly to your lender for free, or you can choose to use a claims firm if you prefer support with the process. Either way, the important step is to check whether your old car finance agreement could be affected.