UK consumers continue to see PCP car finance as an attractive way to fund their next vehicle, despite growing awareness of historic motor finance claims and concerns over undisclosed commission arrangements.
New figures showing continued growth in consumer car finance suggest that confidence in financing a vehicle remains resilient, even as the industry works through one of the largest consumer finance compensation issues in recent years.
According to figures reported by Credit Connect from the Finance & Leasing Association (FLA), consumer car finance new business volumes increased by 7% in June 2026 compared with the same month a year earlier, while the value of new business increased by 11%. Across the first half of 2026, new business volumes were 4% higher than in the same period of 2025.
“The figures indicate that, despite considerable media attention surrounding historic car finance agreements, consumers have not turned away from vehicle finance,” explains Gavin Cooper of consumer group, Claims Bible.
PCP finance is still the most popular option for car buyers looking to get on the road,” he continues. “It provides motorists with a flexible route into a new or used vehicle, with an upfront fee and flexible monthly payment – and the option to hand the car back after a few years or buy it outright.”
The continued demand comes against the backdrop of the Financial Conduct Authority’s motor finance redress scheme. The FCA estimates that around 12.1 million agreements made during the relevant period could be eligible for compensation. The regulator says many lenders failed to properly disclose important information about arrangements between lenders and brokers, including certain commission agreements.
The issue centres partly on discretionary commission arrangements (DCAs). Under these arrangements, brokers or dealers could have had the ability to influence the interest rate offered to a customer, with the potential to receive a higher commission as a result. Other arrangements covered by the FCA include high commission arrangements and certain contractual ties between brokers and lenders.
For consumers, the concern is that these arrangements may not have been clearly disclosed at the time a finance agreement was taken out. This has led to a significant increase in interest in car finance claims, with PCP claims calculated on a combination of hidden commissions and interest you paid.
The FCA estimates that eligible consumers could receive an average compensation payment of around £829 per agreement, although individual amounts will vary. In the most serious cases, compensation can include the commission paid plus interest, while other cases will be assessed using the FCA’s prescribed methodology.
Importantly, the claims issue relates primarily to historic lending practices and does not mean that PCP itself is inherently unsuitable or that current car finance agreements are affected in the same way. Consumers continue to use PCP because of its predictable monthly payments and the flexibility it can provide when changing vehicles.
The FCA has also made clear that eligibility depends on the circumstances of an individual agreement. Potentially relevant factors include whether particular commission arrangements were present and whether important information was properly disclosed. Not every historic car finance agreement will qualify for compensation.
The scale of the claims process nevertheless highlights the importance of transparency when consumers arrange vehicle finance. For motorists considering PCP today, understanding the interest rate, deposit, mileage allowance, final optional payment and all associated charges remains essential.
With consumer car finance volumes continuing to rise, the latest figures suggest that confidence in vehicle finance remains strong. While the historic claims process may prompt greater scrutiny of how finance agreements were arranged in the past, it has so far done little to undermine consumers’ willingness to use PCP as a way of funding their next car.
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