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Drivers: Don't forget to check your rear view mirror AND your car finance documents.

If you bought a new or used car in the last 10 years on a finance agreement then you may be entitled to claim compensation due to hidden fees.

What is a mis-sold car finance agreement?

Most people buying new or used cars sign up to what is known as a Personal Contract Purchase (PCP) financial plan.

It has been common practice for the salesperson to receive a large commission from the lender finance company in return for signing the customer up to the PCP finance agreement. Quite often customers are not told about the amounts of commission paid. Commission which is increasing the cost of their car.

Government-backed watchdog, the Financial Conduct Authority (FCA), has recently banned car finance deals where the car dealers and their sales teams could earn more commission if customers were signed up to a more expensive PCP. This would often happen without the buyer even knowing what commission the sales team was getting. This is known as a ‘secret’ or ‘hidden commission’ and meant that customers were unfairly paying more than they should. Some people now have unaffordable car finance bills due to the pandemic.

If you bought a new or used car on a PCP finance scheme, you may be eligible for compensation due to a form of financial mis-selling, hidden commission.

What is a secret/hidden commission?

This is where the car dealer sells you a finance package for the car but does not tell you that they are getting a commission or just how large the commission they are getting is. Most customers expect the salesperson or dealership to make their money on the sale of the car, but they do not realise that they may also be getting a commission from the finance company for the PCP finance agreement that goes with it meaning that the customer is potentially paying more than they should.

Because of the high risk of there being a conflict of interest between the customer and the car dealer (the dealer recommending finance products based on the amount of commission as opposed to what is best for their customer), and to ensure full transparency for their protection, the exact amount of this commission should be disclosed to the customer.

If the payment of commission and the amount of that commission has not been explained, then the customer can claim compensation for mis-sold PCP car finance.

So...if you bought a car on finance and were not told about the amount of commission that the dealership or salesperson received from the company providing the finance plan, then you may be able to claim compensation for PCP mis-selling.

Get in touch and we will get our specialist financial mis-selling lawyers to contact you for a free no-obligation discussion about making a claim.

A word of warning, time limits can apply so if you think you may have a claim, don't delay.


The law firm who provide this service are regulated by the Solicitors Regulation Authority (SRA).

Ancojada Limited trading as Ancojada Group is not authorised or regulated to provide financial advice.

All financial advice is provided by other regulated businesses.

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