PCP’s are already puzzling enough to the average consumer, but this befuddlement is only exacerbated by the media’s own failure to grasp the full idea of what a PCP is.
As they awkwardly attempt to explain the fundamentals of a PCP, which they clearly do not themselves understand, they make multiple errors – only thickening the mist of confusion which seems to be present in almost every aspect of the car finance mis-selling scandal.
It is not just an isolated incident due to lack of research from a single newspaper.
It seems the media giants themselves have seemingly failed at explaining correctly what a PCP is and the issue is widespread.
The BBC, The Times, The Telegraph and The Sun all made simple faults in their explanation
The most common mistake shared between them is very slight but vitally important, it seems there is a mutual misunderstanding of the fact that a PCP is not a lease but in fact a purchase.
Again, the situation is worsened by the fact that some companies are labelling it a personal contract plan rather than personal contract purchase.
The PCP is a hire purchase not a rental or lease.
It is the same concept as a mortgage, you borrow the value of the car and slowly pay it to the lender.
The idea is not that you are renting the car but buying it.
The BBC made this common mistake as they stated boldly: “A PCP allows you to rent the car over a three-year period.”
Sometimes the journalists do correctly label the PCP as a purchase but they then fall short after that when they claim that they are a cheaper alternative to a HP (Hire Purchase).
This is, as I am sure you can expect, wrong.
For both agreements the borrower will borrow the entire value of the car and pay back with interest The only difference is at the end of PCP you have the option if you want to hand back the car instead of paying the final balloon payment.
The Telegraph and The Sun flippantly state that the staff of the car dealers are responsible for the credit checks made.“(The FCA) will also check whether sales staff are carrying out sufficient checks on customers…” (The Sun)
This staff at the dealerships are only responsible for gathering all necessary personal information to send of to the finance company who perform the credit checks.
Their main task is to make sure the details are recorded correctly and not made more appealing to the finance companies.
The FCA is currently looking into how the car dealers are selling products like PCP’s and making sure that they are not mis-selling.
The Times’ article however, is perhaps the most miserable attempt at research as they not only made mistakes on both topics mentioned, but they also created their own diagram explaining a PCP – except that they explained a Hire Purchase plan instead.
They also completely made up the “Implied guaranteed resale price.”
The Times claim to have received their numbers from an independent car leasing broker, why though they did not go to a Mercedes-Benz car dealer which is the supposed car in the diagram, we’re in the dark, much like the writer of their article on the topic of PCP’s.
The failure to conduct even half-decent research into the topic highlights the lack correct available information and lack of enthusiasm surrounding the topic of PCP’s.
The truth that there is such a consistent string of errors and factual inaccuracies brings to light the realisation of complete and simple confusion on the idea of what even a PCP is.
Even trained journalists writing for the top media outlets who have researched thousands of topics all collectively struggled at the task of explaining and understanding the concept of PCP’s.
This is a dire issue as it helps the real culprits behind the mis-selling scandal slip away under the shadows of this ambiguity whilst people are still pondering as to what PCP actually stands for.
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