The disadvantages of PCP car finance can include potential mis-selling tactics, and general disadvantages as a driver.
These tactics can involve ‘discretionary commission agreements’. Flagged within finance agreements, or if customers notice unexpectedly high charges on payments.
Have you experienced the disadvantages of PCP?
First, you need to understand what PCP is, you can find everything you need to know here.
To detect mis-selling, you need to be aware of the tactics detailed in this article. Once you are aware; you may be possibly eligible to claim compensation for car finance.
Potential mishaps by your finance provider may provide you with an opportunity to claim compensation for faults which can cause you financial loss.
How to spot these?
- Interest rates raised on your finance agreement unknown to you
- No ownership possible unless a final balloon payment is made
Do you prefer to own your car?
If so, PCP poses a disadvantage to you; unless you are willing to pay an expensive payment at the end of your contract which only then allows you ownership of the vehicle. The risk of this, is the final payment being much higher than the worth of the car itself.
Are you prepared to pay a hefty deposit in cash? This option is not for every customer. A PCP agreement usually require a deposit upfront, and often expensive. This can pose a problem for those who are not in a position do this.
Do you drive long distances?
Did you you there are restrictions set on PCP-financed vehicles for exceeding the set mileage?
Wear and Tear?
Keeping your car in top condition is essential if you want to avoid wear and tear charges.
How can I find out if I was mis-sold PCP?
If you entered into such an agreement within the last 10 years, you’re potentially eligible for redress. Consider the following:
- Were you aware if the commission the dealership would receive?
- Did the dealer clearly explain the different finance options available?
- Could you afford the credit agreement at the time of the sale?
What is a final payment?
This is not common knowledge. To help you understand, imagine you have reached the end of your contract period, you are now given the opportunity to own the car, or swap it for another car and begin a new finance agreement. How do you own the car? By paying a final sum calculated by your dealer, often very high in price.
What are the risks of breaching your contract?
If you breach your contract and the finance company refuses to honour the Guaranteed Final Value (GFV), you are still required to pay the final payment.
How Can I Claim for PCP?
Following the FCA car finance investigation, car finance claims are high in popularity.
Making a claim with My Car Finance is a simple 3 step process. With just a few details, you can begin an application today. Enter your registration into our automatic number recognition system to get started. My Car Finance Claim works as a trading style of Barings Law, who specialise in consumer redress.
Click the button below to start a claim!
