PCP Car Finance Refund
Of all the car finance options in the UK, PCP financing is the most popular for purchasing a new or used car. Following a report by the Financial Conduct Authority (FCA), it was found that thousands of vehicle owners were victims of mis-sold PCP agreements.
These vehicle buyers are able to make a claim for compensation against the money they lost. This is to ensure car dealers are treating customers fairly and that only the right financing solutions are offered to consumers.
If you took out a hire purchase agreement like this, then you may also be eligible to make a claim. Below, we will cover how this is possible and how the claims process works.
What Is A Personal Contract Plan?
A Personal Contract Purchase (PCP) plan is a type of car finance agreement for individual purchases. PCP car finance deals are a form of hire purchase vehicle finance. It’s the most popular way of financing a car in the UK.
These types of hire purchase agreements work almost like a long-term rental, where the customer can use the car until the contract ends.
Once the PCP contract is over, the customer can either:
return the car
pay the resale value of the vehicle and keep it
or use the vehicle’s resale value towards buying a new car
Generally, PCP car finance agreements last between three to five years.
The amount paid during the period of a PCP agreement is usually higher than the amount for Personal Contract Hire (PCH). PCP finance agreements require deposits and credit checks.
It’s important to understand that PCP car finance agreement terms state that the customer won’t own the vehicle until the end of the agreement. However, the customer can purchase the vehicle with a final payment or balloon payment. This is normally a few thousand pounds.
It is also possible to end a PCP agreement without buying the vehicle outright.
PCP Car Finance Refund Claims
Many car finance providers have been found guilty of mis-selling PCP agreements. Mis-sold car finance is only too common in the UK, and it could result in a claims process where the customer claims back compensation on the PCP agreement.
Mis-sold car finance often happens due to hidden commissions. This happens when car dealers receive a large commission from the finance company for selling a PCP car finance deal. The commission is funded through inflated interest rates and hidden fees, which are included in the monthly payments of the finance agreement. The car dealership does not tell the customer about this commission. As such, the customer has no idea that their high-interest fees are going towards this.
In this case of mis-sold PCP car finance, customers can make a claim for a refund against the money spent on the heavy interest charges.
A customer can also make a PCP car finance claim if the salesperson:
used overly aggressive sales tactics
did not do proper affordability checks
or if they failed to disclose important information about the finance agreement
Basically, mis-sold finance packages happen when the customer ends up with a finance agreement that is not suitable for their means. It could also happen if the customer was not made aware of other financing options or was given poor advice from the salesperson.
In cases where you can prove mis-selling took place, the customer can claim back a refund on the PCP agreement.
What To Do If You Were Mis-Sold Car Finance
If you think you have been a victim of car finance mis-selling, then you can put the case forward to the Financial Ombudsman Service (FOS) and claims management company. If the claim is valid, you will be eligible for claim compensation.
To make this claim happen, you will need to carefully review your finance agreement and any correspondence you had with the car dealerships.
You will need to work with an experienced solicitor to help you put your PCP claim into action. The solicitor will be able to identify whether the PCP claim is valid and how much compensation you deserve. They will then take the correct steps towards gaining compensation.
How To Claim A PCP Car Finance Refund
Start by reviewing your PCP finance deal to identify where the mis-selling took place. Bring this up with the finance company and see if they will make it right.
If they don’t, you will need to bring your car finance claim forward to the FOS with the help of a solicitor. The solicitor will carefully analyze the loan agreements, bank statements, and all other details related to the vehicle financing options. If the claim is successful, it will result in a compensation settlement.
Compensation For Mis-Sold PCP Finance
Compensation for mis-sold PCP finance depends on multiple factors. These factors include:
how much the loan amount was
what the interest rates are
how far into the PCP agreement period the customer is
and what type of PCP mis-selling took place
The compensation provided should be enough to pay back any money spent on interest rates and fees that should not have been in the agreement. While this changes with different agreements, it usually adds up to hundreds or thousands of pounds.
Get A PCP Car Finance Refund Today
Are you ready to make a compensation claim? Paxton Willis can help.
Our panel of experienced PCP claim solicitors will help you understand whether your claim is valid and what steps to take to gain compensation. By working with our solicitors, the claims process will be far easier, and you should be able to earn a higher commission payout.
PCP claims can be made for any new or used vehicles that were purchased through these finance agreements between March 2016 and December 2020. If you feel that you have been paying unnecessary monthly payments towards a mis-sold finance deal, then you may be able to make a claim.
Get in touch with our solicitors to see whether your claim is valid and how we can help you earn the commission payment you deserve.
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