Mis-selling happens whenever an expensive item is mis-sold to the buyer. In case of mis-sold cars, buyers are often misled on the car deals. Car financing is a popular form of purchasing a car in the UK. Most individuals use finance contracts as a means to own a vehicle. Hire Purchase and Personal Contract Purchase are widely known car financing options available to the Britishers.
HP and PCP contracts are similar in nature. Both allow the customer to use a vehicle without full payment. The customer pays out an initial fee, followed by monthly payments. In the PCP contract, the monthly payout is reduced compared to HP finance. However, at the end of the PCP contract, the customer has an option to pay the final balloon payment.
Individuals who purchased a BMW on a PCP finance during 2007 and 2021 might have been mis-sold on their PCP deal. They should seek a BMW PCP claim. The reason is that most of the cars purchased in the UK market over the past ten years might have been mis-sold.
FCA on PCP Investigations
In a recent investigation by the Financial Conduct Authority, also known as FCA, car dealers and lenders charged higher interest rates on finance deals to increase their commissions. This overcharging of fees was not disclosed to the customers and comes under mis-selling of the financial contract. Therefore, all car buyers should seek compensation for their mis-sold PCP deals.
Furthermore, the FCA has called out names of the top financiers who might have charged high interest rates as a means of gaining income. The top financiers are, namely, Black Horse and MotoNovo Finance. Thus, if anyone had bought a mis-sold BMW from these lenders, they may appeal for a BMW PCP claim.
The FCA is also concerned about the results of this investigation. This is a big issue in the UK financial market, as millions of pounds are presumed to be paid to the customers. This case resonates with the Payment Protection Insurance (PPI) scandal, where very similar compensation was paid out to the customers. However, the investigation is still ongoing, and lenders have stopped charging discretionary fees on new PCP contracts signed after January 2021.
Have You Been Mis-Sold? What Steps Should You Take?
Anyone who signed a PCP or HP contract before January 2021 might have been mis-sold. Our website, Drive Back Financial, mentions a free claim checker that allows you to check your eligibility easily. This mis-sold car finance check will then take you to the next steps required to file a PCP claim.
Usually, anyone looking to file for a PCP claim should first evaluate the reasons for mis-selling. Here are the top reasons for mis-sold car finance deals.
- You were charged unfair or high interest rates.
- The lender or the car dealer did not issue a complete breakdown of the total costs.
- The dealer did not run an appropriate affordability check.
- You were not offered the best car finance deal.
- You were not informed of the mileage, wear and tear, or other car restrictions.
- You did not know about the final balloon payment.
Once you identify the reason, you can apply for a claim. Gather all relevant materials to support your claim. PCP claims are a legal process and require time and proper evidence to support your argument. If you have anything that shows a discrepancy between what is done and what was promised, you can use it against the finance provider. Our PCP claim experts will assist you throughout the claim process.
Key Tips to Keep in Mind
The key to avoiding mis-sold PCP deals is to analyse the contract and understand your rights. Sometimes, mis-selling PCP occurs due to misinformation. If you are aware of the terms and conditions of the car finance agreements, then there are fewer chances of mis-selling. You should know about the end-of-term options for a PCP contract. They will help you navigate your finances much more easily.
The end-of-term options for a PCP contract holder are:
- Return:
You have the option to return the car without paying any additional amounts. If you exceed mileage restrictions, you may have to bear additional expenses. Similarly, you have to pay for the excessive wear and tear of the car.
- Retain:
If you want to retain your BMW, Audi or any favourite car, you can do so. All you need to do is to make the final balloon payment. The final payment is optional and is adjusted for depreciation and monthly instalments.
- Renew:
You also have the option to drive a new model once you end your monthly instalments. To do so, you will have to sign a new contract adjusting the remaining equity.
Furthermore, you should also seek independent advice before signing any new deal. You should try to avoid pressuring sales tactics and make an informed decision. Documenting everything is a reasonable approach to avoid any mishaps in the future. Asking the right questions at the right time and ensuring that your PCP contract is fair and transparent will help you avoid the hassle.