How is a PCP Contract Mis-Sold with Mercedes-Benz Financial Services

Mercedes-Benz is recognised as a luxury automobile brand. It is associated with high-performance and cutting-edge technology. It depicts an innovative and sophisticated lifestyle. Mercedes-Benz Financial Services aims to provide ease and financial flexibility to its customers that align with their unique needs and lifestyle requirements.

Whether you are looking for a brand-new Mercedes car or a pre-owned car, Mercedes-Benz Financial Services offers a range of financial services. These options allow customers to enjoy the thrill of driving a new car without a financial crisis.   

Types of Car Finance

With various car financing options available, MBFS offers a hassle-free car finance process. The most common car financing options include Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements. 

A Hire Purchase (HP) car finance agreement is similar to a PCP agreement. It consists of an initial payment and fixed monthly instalments. The monthly payments are fixed and do not vary with the time span. After completing the monthly payments, the customer becomes the owner of the car. This contract usually lasts for two to five years. 

Whereas, in a PCP contract, the monthly payments are not fixed but are lowered compared to HP instalments. The PCP contract offers three options at the end of the term. These options are known as retain, return or exchange the car.

If a customer wants to retain the car, he can pay the remaining amount as a final lump sum to own the car. This is typically referred to as a balloon payment or a Guaranteed Minimum Future Value (GMFV). This is an optional payment which is only due when the customer wants to retain the car after the end of the PCP contract. 

Otherwise, customers are free to return the car without making any extra payments. However, if, after some time, they want to exchange it for a new one, they can sign a new PCP deal. 

These three end-of-term options are only available to PCP contract holders. This is why people prefer buying a car on PCP deals. But unfortunately, not all customers understand the perplexities of PCP and other car financing contracts. As a result, some customers are mis-sold on car finance deals. 

How was PCP Mis-Selling Discovered?

In January 2021, the Financial Conduct Authority (FCA) banned the practice of Discretionary Commission Arrangements, also known as DCAs. According to the reports lenders charged higher interest rates to their customers as a result of DCAs. A formal investigation is still ongoing and gathering details about the PCP contracts that were mis-sold before 2021. If anyone purchased a car on finance between 2007 and 2021 then there are great chances that they can be mis-sold on their car deals.

How can a PCP Contract be Mis-Sold?

A PCP contract can be mis-sold due to multiple reasons. A PCP or an HP contract is a complex legal document that is not easily understood by the customers. Customers need proper guidance and professional advice on signing a new contract. It is the utmost responsibility of the lender and the car dealer to inform the customer about the terms and conditions of the PCP contract. If they fail to do so, the customer can apply for a mis-sold car finance claim.

Furthermore, a PCP contract can be mis-sold if the customer is uninformed about the final balloon payment, wear and tear costs, mileage restrictions and the breakdown of the total costs of the contract. Many customers complain that the broker or the lender did not provide a complete breakdown of the total costs of the PCP contract. They were uninformed about the commissions made through the deal and the excessive interest rates that were charged on the deal. These are just a few reasons for mis-selling. If this happens, the customer can seek PCP car compensation

Moreover, PCP contracts can also be mis-sold if the customers are not offered the best financial product suitable for their needs. Sometimes, the car dealer or the salesperson pressurises the customer to sign off a deal immediately without giving him enough time to consult with another advisor. This causes stress and financial crisis to the customer later on in his life. As a result, the customer can file a claim against the car dealer. To avoid such scenarios, it is always recommended to take your time and seek professional guidance and satisfaction before signing any car financing agreement. 

Start Your PCP Claim Process

If you think you have been mis-sold on your car finance agreement before 2021, you should seek help from our PCP claim experts at Revive Solutions to make a claim against your contract. You can make a claim against any car dealership. If you have been mis-sold by Volkswagen Financial Services, you can apply for a PCP refund. 

Our PCP claim process is simple and easy. It does not involve any complications or excessive charges. We gather all relevant information about your PCP deal to identify your mis-selling issue. After that, we forward your complaint to the relevant authorities and wait for your compensation. This is our claim process. You can study our website and fill out our form to get more details about your case. Our goal is to make you happy and satisfied. So, get in touch with our PCP claim experts.