If you’ve purchased a new or used car on finance, you’d be hopeful that you got the best possible deal for your circumstances. But what happens if you’ve been mis-sold car finance?
Buying a car on a Personal Contract Purchase (PCP) is an increasingly popular option for many of us who would otherwise be unable to fork out for the full cost in a one-off payment. PCP allows you to pay an initial deposit, followed by monthly payments, and depending on the details of the agreement, a final ‘balloon’ payment if you wish to purchase the car outright.
While PCP agreements are certainly a very attractive option for anyone looking to buy a new or used car in the UK, there are some risks to be aware of, the most notable of which being the threat of being mis-sold car finance.
Members of the public are now making PCP claims in retaliation to being subject to hidden fees that inflated the sale price, or being misled about the details of the agreement.
So, what should you do if you think that you have been mis-sold car finance? And what could you potentially stand to win? We’ll answer those questions and more in the following post.
What is the PCP Scandal?
You should be aware that, when a dealer or lender offers a PCP car finance deal, they’ve got a legal obligation to inform you of exactly what is involved in the deal and what they are allowed to do. Unfortunately, that doesn’t always happen, which is why there is an ongoing scandal which needs to be addressed.
The Financial Conduct Authority (FCA) conducted an investigation into these particular issues and found evidence of widespread mis selling of car finance, with various types of PCP deals all being affected.
For instance, some lenders have been found guilty of incentivising brokers and car dealers to charge higher interest rates so that they could in turn receive higher commissions. On the subject of commissions, it’s also been found that some consumers are not being fully informed about the commission, which is being paid, causing them to unfairly pay more money on PCP than they actually should have.
How Do You Know if You Have Been Mis Sold Car Finance?
It’s important to note that not every PCP deal is guaranteed to have been mis-sold. That’s why it’s essential to take stock of what an individual deal involved and what the potential warning signs are that could point towards car finance being mis-sold.
Car finance may have been mis-sold if you believe that the salesperson selling the PCP deal failed to adequately run through all of the potential options at your disposal, or any alternative deals that may have suited your circumstances. Similarly, if a salesperson did not tell you about receiving a commission on the sale or didn’t inform you that you’d be the one paying it, that’s also likely to amount to mis-selling.
Admittedly, discovering whether you have been mis-sold car finance can be a tricky process, especially if the answers to these issues are buried in mountains of complicated paperwork, or the deal took place a long time ago.
However, that leads us nicely to the next point of discussion; what steps you should take and who could potentially help you if you think that you have been mis-sold car finance.
What Do I Do If I’ve Been Mis-Sold Car Finance?
If you believe that you may have been mis-sold car finance, the first step you should take is to find out whether you are likely to be eligible to make a PCP claim. If you’re able to make a successful PCP claim, you’ll be able to access compensation which will cover, or subsidise, the financial losses you may have experienced as a result of being mis-sold car finance.
Bringing forward a claim for mis-sold car finance will, understandably, be a daunting prospect, given that there are so many details that need to be addressed.
That’s why it’s strongly advised that you should speak to an expert. There are a number of legal professionals who now have substantial experience and expertise in dealing with mis-sold PCP. So, they’ll be in the best position to review your situation and advise you whether making a claim is likely to be in your best interests.
If it is, they’ll be able to guide you through the whole process and do all the heavy lifting on your behalf. If all goes to plan, you should come out the other side with compensation that helps you to move on with your life.
How Much Compensation Could I Receive If I Make a PCP Claim?
The exact amount of compensation you could receive if you have been mis-sold car finance will ultimately depend on a number of different factors.
Depending on the extent of the mis-selling and the actions taken by the lender, mis-sold car finance compensation could range from a few hundred pounds through to several thousands. The figure will likely depend on factors such as the size of the loan and the Annual Percentage Rate which was charged.
It’s also worth mentioning that you will probably still be able to make a PCP claim if your loan is still ongoing. You won’t necessarily need to have paid off the final balloon payment.
Have You Got Any Other Questions About PCP Claims?
In this post, we’ve discussed what it means to have been mis-sold car finance, what steps you can take to help resolve the issue and the level of compensation you may be able to receive if you’re an unfortunate victim.
Have you got any more questions of mis-sold car finance? If so, feel free to leave them in the comments below!
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial professional. Be sure to consult a financial advisor if you’re seeking advice on your finances. We are not liable for risks or issues associated with using or acting upon the information on this site.