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Can I Claim For Mis Sold PCP Car Finance?
By Jamie Scott
The mis-selling of PCP finance contracts has been a hot topic in the media recently.
The Financial Conduct Authority (FCA) found that some car dealerships were mis-representing the costs and benefits of PCPs to customers, which led to them being mis sold.
This article explores whether or not you can claim for mis sold PCP car finance and if your dealership is one of those who have mis represented their services; it also discusses what you need to do if this is the case.
Can I claim for mis-sold PCP?
Yes, in theory if the finance company have not included the salespersons commission within the PCP car finance agreement you signed for then there would a good chance you would be eligible for a PCP claim.
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How could I have been mis sold PCP?
There are a few ways that someone could be mis sold PCP:
A salesperson can mis-represent the level of APR, not disclosing hidden commission, misusing credit checking facility, not fully explaining the car finance agreement and its T&C.
The FCA found that some car dealerships were mis-representing the costs and benefits of PCPs to customers, which led to them being mis sold.
You can be mis-sold car finance multiple ways by car dealers.
Below I have gone over some of the main mis-selling points.
Hidden Commission
Car finance companies are known to hide the fact that they pay commissions to their brokers for selling car finance deals.
In 2018, a mystery shopper survey examined the procedures followed by 122 Motor Finance providers.
Only 11 of those 122 merchants informed consumers that commission may be earned by the broker for arranging the financing.
This goes against CONC standards since it gives rise to an unequal relationship between consumer.
The Difference in Charge commissions.
It has been discovered that lenders frequently reimburse a broker with a commission in proportion to the interest rate they sell, incentivizing them to charge higher rates.
Customers would spend £300 million each year as a result of this conduct.
The most damaging Different in Charge models, according to an FCA consultation titled “Motor Finance Discretionary Commission” commission disclosure.
The FCA discovered that Difference in Charge models are the most damaging to customers, with 95 percent of the 1000 agreements it looked into.
Finance Agreements Not fully explained.
The FCA’s mystery shopper exercise, which was conducted in 2012, wanted to see whether lenders fully disclosed all necessary information about motor finance agreements before signing them.
Shoppers judged that the concept of acquiring a vehicle via PCP was frequently neglected or inadequately explained.
The mystery shoppers were not informed by the broker that they would not fully own the car until after they had paid the final ‘balloon payment.’
The FCA said that they are ‘not convinced that firms are sticking to legal standards.’
Another 6 ways you could of been mis sold car finance
- You might have been mis sold PCP car finance if you were told that the interest was fixed.
- You might have been mis sold car finance if you were told that your monthly payments would stay at a set amount.
- You might have been mis sold car finance if you didn’t understand how much deposit you had to put down
- You may have been mis sold car finance if they got your details wrong on their system and agreed to something without telling you
- You might be in the process of being mis sold pcp car finance because it’s not clear what all the costs are yet, or what will happen when your contract ends.
6 Your credit rating could influence whether or not they will offer to sell you a car on finance at all.
7 You might not know that there are other types of financing available to suit your needs.
What to do if I was mis sold PCP?
If you think your dealership has mis sold you a car finance deal you should start by complaining to them.
If they won’t help you or your complaint was not dealt with correctly, contact the finance company and ask for a copy of all paperwork in relation to PCP car finance.
If it turns out that mis sold PCP has occurred then you can claim on what is called ‘non-compliance’. You do this through The Financial Ombudsman service.
Alternatively Click Here and request a call from Mis Sold Car Finance who could help you make a claim.
How do I check if I have been mis sold?
You can check if you have been mis sold PCP by completing PCP claims checker
This will calculate how much your PCP agreement has cost you and tell you whether it’s worth your time to make a complaint or not.
What is a PCP claim?
If you strongly believe you was mis-sold your PCP car finance agreement you have a right to claim.
Majority of PCP car finance owners right now are making PCP claims due to hidden commissions as the FCA recently banned these commissions throughout all the dealerships in the UK.
It was found that salespeople were allowed to dictate the rate of interest.
The higher the interest rate that was charged by a salesman the higher his commission was.
As well as hidden commission here are a few more mis-selling aspects that could entitle you for a PCP claim.
- PCP agreement was not fully explained.
- Misled with numbers
- Ineffective credit checks
- The Car finance company or broker was not regulated
- Unfair charges and fees
How much PCP compensation can I get?
On average £3,300, sometimes much higher depending on how much your deposit was, Level of APR interest, if commission has been included in your car finance agreement etc.
Read this article were we go over in more detail about PCP compensation.
Can I be mis-sold PCP millage
yes, because you might not have been told that your PCP agreement included a mileage limit, or if the salesman made it sound like there were enough miles on your agreement for you to do your daily activities.
If you think you was mis sold millage then ask yourself these questions:
did the salesman make it sound like there would be a limit on how many miles per year?
Did they mention that if you exceed an agreed mileage allowance this would affect your monthly payments?
Why do car salespeople push PCP
Car Salespeople push PCP because it’s the easiest way to make money.
They’re getting commission on your agreement; this can be anything from £400-£800 depending on how much of an improvement they gave you over other finance options.
PCP mis-selling complaints are more common than you think and many people have been affected.
What to watch out for when dealing with a car salesman
- Know your budget and stick to it
- Don’t be afraid to walk away if you don’t like the deal
- Be prepared with a list of questions for the salesman before going into the dealership
- Don’t let them pressure you into buying something that isn’t in your budget or doesn’t fit what you need
- If they refuse to provide certain information, feel free to leave without buying anything
- Get all paperwork signed before leaving so there are no surprises when it comes time for delivery or payment.
Mis-sold PCP conclusion
If you strongly believe you was mis-sold your PCP car finance agreement, you have a right to make a claim. This is because many people are affected by mis sold PCP and it’s becoming more common than not.
If this sounds like something that might be happening to you or someone else in your life, take the time to research how PCP mis selling works before making any decisions about whether or not to pursue legal action against the dealership who mis sold your loan.
There are plenty of resources available on the internet for those who want help understanding these complex financial terms so they can negotiate their own contracts with confidence without getting mis sold again!
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