What Are PCP Car Finance Claims, and Are You Eligible?

PCP car finance claims are becoming more widely discussed, especially with the Financial Conduct Authority (FCA) highlighting problematic practices in motor lending deals. 

This heightened scrutiny is changing customer awareness. Many are now realising they have been misled by PCP agreements as brokers or lenders fail to provide full details of the loan. 

If you have entered into such a deal, you might want to know whether you are eligible for a PCP finance claim because this practice is more common than you think.

Consumers who feel they have been misled have the right to file a PCP car finance claim. Read on to learn more about PCP claims, eligibility criteria, and real-life examples of mis-selling. 

What are PCP Car Finance Claims?

PCP car finance claims arise when consumers feel they have been mis-sold a PCP agreement. One thing you should know is that it can happen in different ways. Some deals might initially appear attractive but may have issues hiding somewhere in the fine print. 

One common problem is discretionary commissions. Dealers typically earn via commissions, incentivising them to use harmful commission structures to increase their earnings at the expense of consumers. 

Another issue is when the contract terms are unclear. Take note that financial agreements are often complicated. If you are not fully aware of what to look for, you might still pay more.

Look out for things that could lead to unexpected added expenses like balloon payments, admin charges, optional add-ons, and early payment penalties. 

Eligibility for a PCP Car Finance Claim

How can you tell if you are eligible for a PCP car finance claim? Several factors come into play. The key is finding out whether the deal was mis-sold. Remember, transparency matters a lot in financial agreements. 

According to the FCA, individuals become eligible when they fall victim to unfair commission schemes, as these practices are deemed predatory. 

Filing a PCP Claim

1. Review our contract for any inconsistencies to uncover hidden costs or other irregularities.
2. Gather all supporting evidence by collecting documents and dealer communications, as well as misleading advertising materials like brochures. 
3. Include details from the contract, such as your name, policy number, signing date, vehicle plate number, and address at the time of signing. These specifics help verify your claim. 
4. Wait for a final response from your provider. 
5. Assess whether the proposed resolution is acceptable in your favour.
6. If not, present the same paperwork and information to the Financial Ombudsman Service to file a formal car finance complaint with authorities. 

Examples of Mis-Selling in PCP Car Finance Agreements

Mis-selling can take many forms. To give you an example, you just need to look at the three landmark cases recently heard by the Court of Appeal involving Firstrand Bank (MotoNovo) and Close Brothers. 

In Johnson v. Firstrand Bank, Mr. Johnson was not aware that the broker was getting extra payments through commissions by recommending the financing option. This undisclosed detail made it a mis-sold agreement because the full details were not discussed.

Another issue is when brokers only show you one finance option, restricting you from making an informed decision. It can make you feel like you do not have any other choices. A similar issue was handled by the Court in Wrench v. Firstrand, where the ruling was in the consumer’s favour.

You should also look out for balloon payments, which are the final payments you make at the end of the contract. The thing is, balloon payments tend to be larger than the monthly price. 

It can be considered a mis-selling element when left undiscussed or insufficiently explained because it can mislead the customer to think that the deal is more affordable than it actually is.

Misrepresentation is also another issue that can lead to mis-sold contracts. For example, incomplete or omitted information can make the agreement unfair as the customer would be making decisions without knowing the full picture. 

High-pressure sales tactics can also be considered mis-selling. If you were rushed into a decision or felt like the salesperson forced you to sign quickly, you might have a claim on your hands. 

Conclusion

PCP car finance claims offer a remedy for customers who suspect their agreement was mis-sold, especially as they provide a means to challenge unfair practices and obtain compensation. 

Whether the issue is hidden charges, unclear terms, or aggressive sales tactics, you have the right to file a complaint and assert your rights as a consumer.