In the UK, people who cannot afford a car have different alternatives to using a car. They have invested in different car finance schemes. Out of all, Personal Contract Purchase (PCP) is the famous car finance scheme. Before you dive into PCP claims, you should understand what PCP is and how it is useful to car enthusiasts.
Understanding PCP Car Finance
A PCP plan allows the individual to drive a car for at least three years. They have to make monthly payments for the car’s value, which is around 10% with interest added. With various options in the PCP plan, you can also choose to keep the car. If you make the balloon payment, which is a lump sum of the car’s value, then you own the rights of the car. However, if you do not want to keep the car anymore, then you don’t need to sign another PCP agreement. Moreover, you are given a wide range of vehicles to choose from. At every PCP agreement, you can choose a new car, depending on whether you did not damage the previous vehicle. But, with PCP plans, sometimes, PCP claims also come.
FCA Investigation
The Financial Conduct Authority (FCA) has recently raised concerns about PCP plans. People have made PCP claims with dealers because they have been mis-sold. According to the FCA, the dealerships have made much money by making higher interest payments and securing more commissions. Therefore, it has been difficult for people to pay for PCP plans and result in PCP claims.
Eligibility for a Mis-Sold PCP Finance Claim
There are various indications of whether you were mis-sold a PCP car finance claim. The first sign of mis-selling PCP car finance is when you see that, with time, you are unable to make the monthly payment. It has become difficult to afford a car after a few months as the interest rates have increased. Secondly, you may have misunderstood the PCP agreement, where you did not learn about commissions. If the commission is not mentioned in the agreement, you are eligible for a mis-sold PCP claims. You may have been pressured to get into a car finance claim by a dealer, which did not give you time to understand the PCP plan at all. There could be more reasons why you were mis-sold a PCP car finance claim.
How Can I Get Compensated for PCP Claims?
The first thing to do is hire a PCP claims solicitor. They can guide you about the PCP plans and how you can successfully be compensated for your claim. You will contact them and provide them with the details in a form that is available on their website. The solicitors will analyse your case based on the form you have filled, which has every detail about your case. After analysing your case, they will work on the PCP claim that works better for you.
Who Will Compensate Me for Car Finance Claims?
The dealer will compensate you, but the solicitor you hired will negotiate for your compensation. Therefore, you do not have to worry about your money; you have to sit back and relax while the solicitors deal with your claim free of cost. If they do not win the compensation, you do not have to make any payment to them.
Differences Between PCP and Hire Purchase
When buying a car on loan, learning about different car finance options is important, or else you will be mis-sold. If you pay back the entire value of the car through your deposits and monthly payments, that is known as a hire purchase (HP), whereas, in the PCP plan, you will make a deposit, monthly payments and a balloon payment. However, there are cheaper deposits in the PCP plans. You will be charged for exceeding mileage in the PCP plan, but that is not the case in the HP because you will own the car by the end of the agreement.
PCP Vs. HP
People who do not wish to buy a car for life can choose a PCP plan, but they must make sure they can avoid PCP claims. HP is a better option if you want to own a car for a lifetime. Suit your pocket for a car finance plan because rising inflation will have high costs.
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