For entrepreneurs, careful financial management is second nature. Every subscription, supplier contract, or travel expense is tracked with precision to protect margins and ensure long-term growth. But one expense area that’s drawing renewed attention is personal car finance—specifically, PCP agreements that may have been mis-sold.
While PCPs have become a popular way to fund new vehicles, thousands of drivers across the UK are now discovering that they were not given full or fair information at the point of sale. As a result, many individuals are filing PCP claims to seek redress. For entrepreneurs who financed a personal vehicle, and not one used primarily for business, this could represent an opportunity to recover money they’re rightfully owed.
Importantly, these claims apply only to agreements taken out for personal use. If the vehicle was used for business purposes, even if financed through PCP, the agreement is typically not eligible for a refund.
Understanding PCP Finance and Its Appeal
A Personal Contract Purchase (PCP) agreement allows a car buyer to pay lower monthly instalments for a fixed term, with a large optional payment at the end if they wish to buy the car outright. It’s especially attractive to individuals who want flexibility—whether that’s returning the car at the end of the term, or upgrading to a newer model.
For entrepreneurs who needed a personal vehicle to support their day-to-day lifestyle or commute, PCPs were often the go-to solution. They allowed people to enjoy newer vehicles without committing to full ownership right away.
But between 2007 and 2021, a significant number of these agreements were sold in a way that lacked full transparency. Hidden commissions, confusing end-of-agreement terms, and a lack of choice in finance options are just some of the issues that have sparked the rise in PCP claims.
Who Is Eligible to Make a PCP Claim?
If you financed a personal-use vehicle with a PCP agreement signed between 2007 and 2021, you may be eligible to claim compensation if:
- You were not told that the broker or dealer earned a commission
- The structure of the agreement—especially the balloon payment—was not clearly explained
- You weren’t offered alternative finance options
- You felt pressured into signing the agreement quickly
However, if the car was used for business purposes—such as client meetings, deliveries, or operational duties—it’s unlikely the agreement qualifies under current consumer protection guidance. PCP claims are designed to support individual consumers, not commercial transactions.
Why Personal Finance Scrutiny Matters to Entrepreneurs
Although many entrepreneurs use separate vehicles for their businesses, some have financed personal cars on PCP that they later discovered were mis-sold. These individuals are now taking action to protect their personal finances and ensure they weren’t unfairly charged.
Their motivations include:
- Recovering overpaid interest: Many consumers unknowingly paid inflated interest due to undisclosed commissions.
- Improving financial wellbeing: A successful claim could return a substantial amount of money—useful for paying down other personal debts or investing elsewhere.
- Taking a stand against poor practices: Entrepreneurs know the value of ethical selling. Challenging mis-selling sends a powerful message.
What Went Wrong with Many PCP Agreements?
Between 2007 and 2021, many PCP deals were arranged under commission-based models. This meant the dealership or broker could adjust the interest rate—often increasing it—to boost their own earnings. Unfortunately, customers were rarely made aware of this.
Many individuals who later filed a Black Horse finance claim discovered that:
- They were offered only one type of finance, with no comparison
- Their dealer failed to explain how commissions worked
- The true cost of the deal wasn’t made clear, especially at the end of the agreement
These issues led to widespread complaints and have since triggered regulatory investigations into the fairness of PCP finance.
How to Begin the Claims Process
If you believe your personal-use PCP agreement may have been mis-sold, here’s what to do:
- Locate your finance documents: Look for your agreement, payment schedule, and any supporting emails or paperwork.
- Check for commission details: Was commission mentioned? Did the interest rate seem higher than expected?
- Submit a formal complaint to the lender explaining why you believe the agreement was unfair.
- Escalate if necessary: If your complaint is rejected or ignored, you can take it to the Financial Ombudsman Service for independent review.
If your agreement was made specifically for business use, a PCP claim is not likely to be successful. You may want to speak with a solicitor or financial adviser to explore other legal avenues if you still have concerns.
Avoiding Pitfalls in the Future
Whether you’re an entrepreneur or not, protecting your financial interests starts with being informed. If you’re considering a new finance deal, keep these tips in mind:
- Ask directly about commissions: Finance brokers must disclose if they’re being paid by the lender.
- Insist on transparency: Make sure balloon payments, charges, and your end-of-agreement options are crystal clear.
- Don’t be rushed: Take the contract home. Read it thoroughly. Consult someone if you’re unsure.
- Ensure the purpose is clear: Personal use agreements fall under different consumer protection laws than business contracts. Make sure the purpose of the vehicle is correctly recorded.
Final Thoughts: Protect Your Wallet and Your Rights
Entrepreneurs are known for spotting inefficiencies and seizing opportunities—and mis-sold PCP finance is one area where personal vigilance can pay off. If you entered into a personal-use PCP agreement between 2007 and 2021 and weren’t given all the facts, now is the time to act.
A growing number of consumers are filing PCP claims and winning compensation. Some are doing so after uncovering hidden commissions in deals arranged through dealerships, triggering investigations like those involved in major Black Horse finance claim cases.
As always, the key is clarity. By understanding what qualifies, reviewing the paperwork, and recognising that only personal PCP agreements are eligible for redress, you can take back control—and possibly even recover money you never expected to see again.
