For many drivers across the UK, car finance offers a practical route to owning a vehicle without needing to part with a large lump sum upfront. One of the most widely used options is the Personal Contract Purchase, or PCP. With flexible terms and manageable monthly payments, PCP has become a popular way to drive a newer vehicle without the commitment of a full purchase.
But beneath the surface, not every deal has been as transparent as it appeared. In fact, thousands of drivers may have been paying more than necessary — and some were never told the full story of how their deal was structured. This has led to a rise in PCP claims, with consumers seeking redress for agreements that may not have been fairly explained or fairly priced.
What Is PCP and Why Is It So Popular?
A Personal Contract Purchase agreement is a finance arrangement that typically involves a deposit, a series of fixed monthly payments, and a final “balloon” payment if the driver wants to own the car at the end of the term. Alternatively, they can return the car or trade it in for a new deal.
It offers flexibility, lower monthly payments than traditional loans, and the option to change vehicles regularly — which makes it especially attractive to people who value new models or lower upfront costs.
But this apparent convenience has sometimes masked hidden complexities, and that’s where problems have emerged.
The Problem with Some PCP Deals
The crux of the issue lies in how PCP deals were explained, priced, and structured — particularly when it comes to commissions and interest rates. In some cases, dealerships or brokers were allowed to set the interest rate offered to the customer. The higher the rate, the more commission they earned. This was not always disclosed clearly to the customer.
As a result, some people ended up paying significantly more than they should have. Worse still, they may have believed they were getting the best deal available, when in reality the terms were adjusted to benefit the intermediary rather than the customer.
The Financial Conduct Authority has since taken steps to ban these types of commission models. However, the impact remains for those who signed agreements in the past — especially between 2007 and 2021, when these practices were most common.
How to Know if You’re Affected
Not every PCP agreement is problematic. But there are signs that yours may not have been fairly arranged. Ask yourself:
- Were you told that your interest rate could be adjusted by the dealer?
- Did anyone explain if and how commission was involved in the sale?
- Were you encouraged to make a quick decision without time to compare options?
- Did the overall cost of the agreement feel higher than expected by the end?
If you answered yes to any of these, it may be worth reviewing your agreement or speaking with someone who can assess it.
Understanding PCP Claims
PCP claims are legal complaints raised by drivers who believe they were misled or treated unfairly during the car finance process. These claims typically focus on:
- Lack of transparency about commissions
- Inflated interest rates for financial gain
- Failure to provide clear and balanced information about the total cost of the agreement
The goal is to help affected drivers receive appropriate compensation or a PCP refund where justified. In some cases, this could mean recovering money unfairly paid, reducing outstanding balances, or simply getting clarity and closure.
Claims are not automatic and require a proper review, but they offer a route to justice for those who were mis-sold.
A Closer Look at Black Horse Finance Claims
Some drivers are specifically pursuing Black Horse Finance Claims. These relate to agreements with this lender where similar concerns have arisen, including the way commissions were handled or how the terms were communicated.
Again, the issue is not about the company itself being at fault in every case, but whether each individual customer was fairly informed and whether their agreement followed regulatory guidelines. If not, they may have the right to bring a claim.
Why These Claims Matter Now
The rise in PCP and Black Horse Finance Claims is part of a broader movement toward consumer fairness in finance. Just as the PPI scandal revealed systemic issues in the banking world, PCP mis-selling is highlighting how even well-known financial products can be misunderstood or misrepresented.
There’s also a growing awareness that financial agreements should be as clear and balanced as any other major purchase. Consumers are increasingly empowered to ask tough questions and seek redress when they feel something has gone wrong.
Protecting Yourself from Overpaying
Whether you’re currently in a PCP deal or considering one, it helps to be informed. Here are a few tips to protect your financial interests:
- Ask about commissions: Always ask whether the dealer earns a commission and how your rate is set.
- Request a clear breakdown: Get a full summary of costs, including any balloon payment or mileage charges.
- Take time to compare: Don’t feel pressured into accepting the first offer. Shop around for better deals.
- Read the agreement thoroughly: Even if the paperwork seems long, take the time to review it carefully.
Final Thoughts
Car finance shouldn’t be a financial trap. And for many, it isn’t. But there’s growing evidence that thousands of drivers may have paid more than they needed to — and never even knew it.
If you took out a PCP agreement between 2007 and 2021, you may be eligible to explore a PCP claim. And if your deal involved unclear commissions or inflated interest rates, you may have grounds to pursue a Black Horse Finance Claim, or one with another lender, depending on your circumstances.
Ultimately, it’s about ensuring that consumers are treated fairly and given all the information they need to make informed decisions. Transparency, honesty, and accountability aren’t optional — they’re the foundation of trust in financial products.
If you’re unsure about your car finance deal, now may be the time to take a closer look.