PCP Claims Company vs Claiming Directly: Which Is Better for You?
You have a choice when making a PCP mis-selling claim:
Option A: Claim Directly
- Keep 100% of compensation awarded
- Takes more of your time and effort
- Higher chance of mistakes without guidance
Option B: Use a Claims Company
- They handle everything
- They take 15-25% of your compensation as a fee
- Higher success rate due to their experience
There's no legal requirement to use a claims company. Many people successfully claim on their own. But claims companies exist for a reason—they make the process simpler and faster.
How Claims Companies Work
A claims company (like MotorRedress or others) essentially works as your agent. Here's the process:
- You contact them with basic info about your PCP
- They assess eligibility - Is your claim viable?
- They collect your documents - You provide originals, they make copies
- They prepare the claim - Write the formal complaint letter
- They submit to the lender - On your behalf or with your signature
- They negotiate - Back and forth with the lender on your behalf
- They deduct their fee - Usually 15-25% of total compensation
- They pay you - The remaining 75-85% goes to you
Most claims companies operate on a "no win, no fee" basis:
- If your claim is rejected, you pay nothing
- If successful, they take a percentage (typically 15-25%)
- Average compensation is £700, so you'd net £525-600 after fees
Real-World Financial Comparison
Let's say your claim is worth £800.
If You Claim Directly:
- Compensation awarded: £800
- Your fee: £0
- You receive: £800
- Your time investment: ~15 hours
If You Use a Claims Company (20% fee):
- Compensation awarded: £800
- Company fee (20%): £160
- You receive: £640
- Your time investment: ~2 hours
If You Claim Directly But Make a Mistake:
- Your claim is rejected because you missed key evidence
- You receive: £0
- Opportunity lost forever
What Mistakes People Make When Claiming Directly
Not referencing FCA findings - Just saying "I was mis-sold" isn't enough.
Incomplete documentation - Missing the original credit agreement means the lender can reject you.
Vague complaints - Just saying "I didn't know about commission" is weaker than detailing exactly what wasn't disclosed.
Wrong lender contact - Sending to the dealer instead of the finance company.
Missing the deadline - Forgetting about the 8-week response window, then the 6-month Ombudsman escalation window.
Accepting a low offer - Not understanding that you can negotiate or escalate a partial rejection.
The Reality: Success Rates Differ
Claiming Directly Success Rate: ~60-70% of claims that reach the lender succeed
Why? Some people file incomplete claims. Some don't escalate to the Ombudsman when rejected.
Claims Company Success Rate: ~85-90% of claims succeed
Why? Professional firms don't make basic mistakes. They escalate properly. They know how to strengthen weak cases.
When DIY Claiming Makes Sense
- You have a simple, clear-cut case
- You have all original documents readily available
- You're comfortable with formal letter writing and paperwork
- You have time to spend (10-20 hours over 6+ months)
When a Claims Company Makes Sense
- Your documents are incomplete
- You're unfamiliar with FCA rules and complaints procedures
- You lack the time to manage this yourself
- You have a complex case (multiple vehicles, refinancing, etc.)
- You want professional negotiation with the lender
Speed Comparison
- DIY direct submission: 2-4 months if lender cooperates
- Claims company submission: 2-4 months if lender cooperates
- DIY + Ombudsman escalation: 6-12 months
- Claims company + Ombudsman escalation: 6-12 months (but they handle the escalation)
Speed is roughly the same. The difference is stress and effort.
Summary: You can claim directly and keep 100%, but claims companies handle the work for 15-25% of compensation. Direct claims work best for organized, detail-oriented people with time. Claims companies suit those who prefer to outsource the complexity. Success rates are similar; the main difference is effort vs. money.