PCP, HP or Conditional Sale — Which Agreements the Scheme Covers

Most UK drivers who financed a vehicle through a dealership took out one of three products. Knowing which one you had is the first step in checking whether you may qualify for redress.

Personal Contract Purchase (PCP)

PCP is the most common way drivers finance new cars. You pay a deposit, monthly instalments and, at the end of the term, choose between paying a large final ‘balloon’ payment to keep the car, handing it back, or trading it in. PCP agreements sold before 1 November 2024 fall within scope.

Hire Purchase (HP)

HP splits the full price of the vehicle across fixed monthly payments. Once the last payment clears, the car is yours. HP is common on used cars, vans and motorbikes and is covered by the scheme where sold in a consumer capacity.

Conditional Sale

Conditional sale is very similar to HP: you pay in instalments, and legal ownership transfers when the final payment is made. It is often used for larger vehicles including campervans.

How to identify what you had

• Look for the words ‘PCP’, ‘Hire Purchase’ or ‘Conditional Sale’ on your original agreement
• Check whether there was a large optional final payment (that points to PCP)
• Check the finance provider — the letterhead and monthly statements will name the lender
• If in doubt, the eligibility check can flag ‘unsure’ and still route you correctly