Personal Contract Purchase (PCP) is one of the most popular car finance options in the UK, offering flexibility with lower monthly payments. However, in recent years, some consumers have raised concerns about whether they were given all the necessary information before signing these agreements. If you believe your PCP deal wasn’t properly explained, you may be entitled to make a claim.
In this post, we’ll take a closer look at what PCP claims are, common issues people face, and what to do if you think you’ve been mis-sold a PCP agreement.
What Is a PCP Agreement?
A Personal Contract Purchase (PCP) agreement allows you to finance a car with lower monthly payments than traditional loans. You’ll typically have the option to:
- Return the car at the end of the agreement with no further payments.
- Make a final balloon payment if you want to keep the vehicle.
- Trade the car in for a new vehicle under a new finance agreement.
While these agreements can be beneficial for many, it’s crucial to understand the terms, as issues can arise if the details aren’t fully explained.
Why Are Consumers Making PCP Claims?
Claims Made between April 2007 & 28th January 2021
If you were sold PCP car finance between April 2007 & 28th January 2021 you were likely mis-sold PCP car finance. The FCA (Financial Conduct Authority) put this timeline in place. According to the FCA:
“Before January 2021, some lenders allowed brokers (the person that arranges your loan, for example, your car dealer) to adjust the interest rates they offered customers for car finance. The higher the interest rate, the more commission the broker received. This was known as a discretionary commission arrangement (DCA). And it may have been applied to your loan without you knowing.”
Many consumers have found themselves surprised by certain aspects of their PCP agreements. Common reasons for filing PCP claims include:
1. Unclear Information About Terms
Some customers report that they were not given clear explanations about the interest rates, the size of the final balloon payment, or other financial commitments.
2. Unexpected Charges
Issues like additional fees for exceeding mileage limits or penalties for minor wear and tear on the car are often mentioned by consumers who feel these charges were not clearly outlined.
3. High Interest Rates
Some consumers believe they were not properly informed about how much interest they would pay over the course of their agreement.
These concerns have led to a rise in PCP claims, with many customers now seeking compensation. The average payout for a mis-sold PCP car finance claim is around £5,318.25
Finance Companies Involved in PCP Agreements
Several major finance companies offer PCP agreements, including:
Blackhorse:
A well-known provider of car finance, Blackhorse offers a range of finance solutions, including PCP agreements.
MotoNovo:
Another leading name in vehicle finance, MotoNovo helps many consumers arrange PCP deals for both new and used vehicles.
Close Brothers:
Close Brothers provides a variety of car finance options, including PCP agreements, through dealerships across the UK.
These companies play a significant role in the UK’s car finance market. It’s important to note that while some consumers have raised concerns, these companies offer thousands of finance agreements every year, and each case depends on individual circumstances. The number of people buying their cars on finance increased again over the last year. Make sure you’re aware of what you are signing yourself up to as a consumer.
What to Do If You Think You Have a PCP Claim
If you feel that your PCP agreement wasn’t properly explained to you or you’ve faced unexpected costs, here’s how you can proceed:
Review Your Agreement: Carefully read through the terms of your PCP deal, paying attention to interest rates, mileage limits, balloon payments, and any other conditions that might affect your finances.
Contact Your Finance Provider: If you have concerns, reach out to your finance provider, whether it’s Blackhorse, MotoNovo, or Close Brothers. They may be able to clarify any points or resolve the issue.
Seek Legal Advice: If you’re not satisfied with the response or believe your agreement was mis-sold, it’s worth getting legal advice. At Courmacs Legal, we specialise in handling PCP claims and can help you determine if you have a case.
Consider the Financial Ombudsman: If your complaint isn’t resolved, you can take your case to the Financial Ombudsman Service (FOS), which offers an independent review.
How Courmacs Legal Can Help
We understand how complex car finance agreements can be. If you believe that your PCP agreement was mis-sold or you were left with unexpected financial commitments, we can help. We specialise in handling PCP claims and can guide you through the process, making sure your rights are protected.
We offer a free, no-obligation consultation and operate on a no win-no fee basis, so if you think you may have a PCP claim, don’t hesitate to get in touch with us today.
Final Thoughts
While PCP agreements offer an affordable way to finance a car, it’s essential to fully understand the terms of the deal. If you feel that your PCP agreement wasn’t properly explained or you’ve encountered unexpected costs, you may have grounds to make a claim.
At Courmacs Legal, we’re dedicated to helping consumers navigate the claims process and ensure they receive the compensation they deserve. Whether your PCP agreement is with Blackhorse, MotoNovo, or Close Brothers, our experienced team can offer expert advice and support.
2 responses
Will me claiming affect the garage that I had the close brothers contract with
If your claim is about the finance agreement itself, it usually won’t affect the garage where you bought the car. Your issue would be with the finance company instead. The garage would only be involved if it’s something to do with the car’s condition or how they sold it to you. If you’re not sure, feel free to reach out, and we can help!