Aside from buying a house, purchasing a car is typically one of the most costly and important life choices that you can make. For most people, buying a new vehicle outright is not an affordable option. That’s why car finance is an essential part of the process. There are several options when it comes to financing the purchase of a new vehicle, including personal contract purchase (PCP).
PCP is a financial loan that provides you with ownership of a vehicle. Similar to a hire purchase (HP) contract, you will be required to pay a deposit followed by several monthly repayments for the duration of the contract. However, with PCP, you don’t pay off the full value of the car and you don’t own the car at the end of the deal unless you pay a final balloon payment.
PCP contracts come with several benefits, including lower monthly payments, protection against vehicle depreciation, and a simplified process for exchanging the car for another vehicle at the end of the term. However, there are also risks that come with a PCP contract. There is no guarantee that you will become the owner of the vehicle unless you can afford the balloon payment at the end of the contract. If you can’t afford it, then you will need to return the car or start a new PCP deal. PCP deals may also come with limitations, such as keeping the vehicle in good condition and avoiding going over a predetermined annual mileage limit. Failure to stick to the monthly repayment plan will mean you are forced to return the vehicle and make a lump sum payment if the car’s value has decreased faster than anticipated.
As with any significant financial decision, it’s important that you receive detailed and accurate information and advice before reaching an agreement. A salesperson is there to secure a new sale for their business, but this should not be at the expense of clearly informing the customer about the specifics of the deal, any associated risks, and other information required to make a well-informed decision. Being mis-sold a PCP finance deal can lead to customers paying more than they should and enduring risks that could have been avoided.
There are several circumstances which may have led to you being mis-sold on your PCP car finance deal. Below are just some of the potential reasons that may make you eligible for a claim. In speaking to one of our experts, we will be able to offer thorough advice tailored to you to determine whether you can proceed with a claim.