Can I make a PCP claim on a car used for business purposes?
Yes, you can make a mis-sold PCP claim on a business-use vehicle, provided the finance agreement was signed in your personal name as a sole trader or small partner.
Under Financial Conduct Authority rules, mixed or total business use does not automatically disqualify you, as long as you were the individual borrower rather than a corporate entity.
- However, if the vehicle was financed under a limited company name or through an employer’s salary sacrifice scheme, it is strictly excluded because corporations are not protected by standard consumer credit laws.
- To qualify for compensation, the finance agreement must have been taken out between 6 April 2007 and 1 November 2024. The core of the claim relies on showing that the dealership or broker used a hidden “Discretionary Commission Arrangement” to artificially bump up your interest rate for a higher payout without your knowledge.
- For sole trader accounts, the protections generally apply to agreements where the total credit amount borrowed was under £25,000.If you meet these requirements, you can launch a claim for free without hiring a claims management company.
How can I make a car finance claim for my business?
According to the Claim Smart website, begin by locating your original contract to verify the lender’s name, the date signed, and the exact account holder. You can then use free online tools, such as the MoneySavingExpert template, to submit a formal complaint directly to the finance provider, even if the agreement has already ended and the car has been returned.
What is a PCP car finance claim?
A PCP car finance claim relates to concerns about how some motor finance agreements were sold between 6 April 2007 and 28 January 2021.
During this period, some lenders allowed dealerships and brokers to use commission arrangements that could increase the interest rate charged to customers. In certain cases, customers were not fully informed about how these commissions worked or how they affected the overall cost of borrowing.
As a result, millions of agreements are now being reviewed. The Financial Conduct Authority (FCA) has estimated that as many as 12 million motorists could potentially be affected by historic commission arrangements.
Consumers who were not treated fairly may be entitled to compensation if their finance agreement is found to have been mis-sold.
Does business use prevent you from making a claim?
Not necessarily. Many people use a vehicle for both personal and business purposes. For example, a self-employed tradesperson may use their car to visit clients during the day while also using it for personal journeys in the evenings and at weekends.
If the finance agreement was taken out as a consumer agreement in your own name, you may still be eligible to make a complaint, even if the vehicle was regularly used for work.
The key factor is often the type of finance agreement rather than how frequently the vehicle was used for business activities.
What if the vehicle was used by a sole trader?
Sole traders are in a unique position because there is often little distinction between personal and business use.
If you are self-employed and took out a PCP agreement in your own name, there is a possibility that you could still fall within the scope of the compensation process. This is particularly true if the agreement was arranged as consumer finance rather than a dedicated business finance product.
Many sole traders financed vehicles through standard PCP agreements, meaning they may still have grounds to investigate whether they are eligible to claim.
Can limited companies make a car finance claim?
The situation can be more complicated when a vehicle was financed through a limited company.
Business finance agreements are often treated differently from consumer finance agreements. If the finance was arranged entirely through a company and intended solely for business use, it may not qualify under the same rules that apply to individual consumers.
However, every case is different. The wording of the agreement, the status of the borrower and the way the finance was sold can all affect eligibility.
For this reason, it is worth checking the details of any historic agreement before assuming you are unable to claim.
How much compensation could be available for a valid claim?
Current industry estimates suggest the average PCP finance payout could be around £829 per vehicle. However, the final amount depends on several factors, including the size of the finance agreement, the interest charged and how the finance was arranged.
Drivers who have had multiple finance agreements over the years could potentially have more than one claim to investigate.
Even if the vehicle has since been sold, returned to the dealership or fully paid off, you may still be able to raise a complaint if the agreement falls within the relevant period.
How can you check if you are eligible for a claim?
The first step is to gather any information you have about the vehicle and finance agreement.
Details such as the registration number, finance provider, agreement number and approximate dates can help lenders identify the contract. Even if paperwork has been lost, many finance companies can locate historic agreements using personal details and vehicle information.
If you are unsure whether the agreement was classed as consumer or business finance, contacting the lender directly is often the best place to start.
Is there a deadline for making a claim?
Yes. The current deadline for submitting a PCP car finance claim is 31 August 2027.
Although this may seem a long way off, millions of potential claims are expected across the industry. Leaving it until the last minute could make it harder to gather documents and confirm eligibility.
Final thoughts
Using a vehicle for business purposes does not automatically prevent you from making a PCP finance claim. In many cases, eligibility depends on how the finance agreement was structured rather than how the car was used on a day-to-day basis.
If you financed a vehicle between 2007 and January 2021, it may be worth reviewing the agreement, even if the car was used for work. With up to 12 million motorists potentially affected and average compensation estimates of around £830, checking your eligibility could be well worth the effort.