Personal Contract Purchase (PCP) agreements are beneficial yet confusing. They offer significant financial benefits to all. However, not all buyers understand the PCP contract to their full. Hence, they get mis-sold on their favourite car deal.
For instance, if you want to buy a Land Rover on a PCP contract, you will go to a reliable dealer to handle all your paperwork and make things easy for you. However, sometimes, they may mis-sell you on your PCP deal, and as a result, you will have to file a Land Rover PCP claim.
Just like a PCP deal, buyers also consider Hire Purchase (HP) car financing. An HP agreement is similar to a PCP deal in nature, as it provides financial flexibility to its consumers. Even so, there are some notable differences between the two.
Differentiate between PCP and HP Finance:
A PCP agreement includes an initial payment, monthly instalments and optional final payment. On the other hand, an HP contract consists of an initial deposit and fixed monthly payments until the customer pays off the total amount.
The monthly payment in an HP contract is higher than the monthly payment in the PCP deal. PCP offers greater flexibility to its users compared to HP agreements. At the end of the PCP contract, a person can either return the car without paying anything, renew the contract, or retain the vehicle permanently by paying the remaining balloon payment.
A balloon payment is also a Guaranteed Minimum Future Value (GMFV). It is only paid when a person wants to retain the vehicle. It is a lump sum amount paid in accordance with the car’s value at the end of the contract. A customer may have to pay additional expenses as well in case of breaking any agreed terms and conditions, such as mileage restrictions and wear and tear of the car.
How is PCP Finance Mis-Sold?
Now, moving on to the important part: how is a PCP finance mis-sold?
A PCP finance can be mis-sold in many ways. If we consider the previous example of a Land Rover PCP claim, we see that the dealer might have mis-sold the vehicle because of a lack of information on the PCP contract. It can also be mis-sold if:
- The dealer or the lender failed to guide you on the limitations of the contract
- The dealer did not provide a complete breakdown of the total costs
- They charged a higher interest rate on your PCP deal
- The PCP contract had hidden fees, commissions or discretionary commission arrangements
- The sales team pressured you to sign the deal
- They did not present the best financial product suitable for your needs
- You were uninformed of the car’s condition and other restrictions
These are some of the most common reasons for mis-selling. Mis-selling happens when an expensive item is mis-sold to its customers. The Financial Conduct Authority (FCA) in the UK has recently analysed a series of mis-sold car deals. This car financing mis-selling happened between 2007 and 2021 when the Discretionary Commission Arrangements (DCAs) were not banned. The FCA states that most car dealers or lenders charge higher prices on finance deals, mainly PCP deals. As a result, the customer paid more interest rates than they were supposed to.
According to consumer financial experts, customers can claim for the motor finance mis-selling if they think they have been mis-sold on their PCP contract.
What should you do if your Land Rover PCP was Mis-Sold?
Anyone can make a claim for mis-sold PCP. If you purchased a Land Rover on a PCP deal in 2010 and have completed the monthly instalments, you may still make a claim. To make a PCP claim, you should first identify the reasons, gather all relevant documents, and then consult our PCP experts at Revive Solutions.
The PCP claim process is not as challenging as it seems. Although it is a legal process, it takes time and consistent effort. Most people do not hire PCP experts and ask the Financial Ombudsman to claim a refund. The Financial Ombudsman Service (FOS) is trained to handle all financial matters between the lenders and the customers. However, sometimes, the lender fails to respond positively, and the customer has to face problems. Therefore, hiring solicitors to handle your PCP claim on your car is a reasonable idea.
Our team at Revive Solutions is trained to tackle each aspect of the PCP claim process. Our website offers a free online claim-checking tool. Anyone can enter their details there and verify their eligibility for the application process. The application process is simple and easy.
We will first identify the reason for mis-selling. Then, we will ask you to provide all documents, including the PCP contract, receipts, e-mails and other materials. These will serve as a piece of supporting evidence. If you are eligible for the PCP refund, our experts will take your case to the next level and guide you throughout the process.