One of the leading car companies is BMW. It is recognised for its luxury, performance, and superior technology. Many people who want to purchase a BMW car choose car financing deals to own the latest models quickly. Car finance agreements have made it quite easy for young buyers to make a quick investment and own their desired vehicle in less time. This is widely practised in the UK, where most young buyers own the latest cars through PCP or HP deals.
However, as a matter of fact, car financing agreements are tricky and complex. Not everyone easily understands the complexities of a car finance deal. Therefore, some of them sign a mis-sold car finance deal. As a result, the buyer then tends to make a mis-sold PCP claim.
As we all already know, there are different ways to finance a car. A Personal Contract Purchase (PCP) and a Hire Purchase (HP) car finance options are the most prevalent in the UK, where most people prefer buying cars on PCP deals.
Why Should You Choose PCP Car Finance?
Let’s say you want to purchase a BMW but do not have enough money to cover the entire cost. So, you opt for the best suitable financial deal to finance your car. You visit the dealership, which offers you PCP and HP finance options. In case you opt for BMW PCP finance, you can make a BMW PCP finance claim if you are mis-sold on the car deal.
A PCP car finance deal offers more flexibility than a regular HP contract. An HP agreement allows you to make an initial deposit, which is then followed by fixed monthly payments until the entire cost is paid off, which may take years.
A PCP deal also takes some time to complete the payment process, but it is more user-friendly than an HP contract. It depends on the customer’s financial situation. In a PCP contract, a customer has to make an initial deposit and monthly instalments, which are lower in amount than in an HP deal. At the end of the monthly payments, the customer is given three end-of-term options, which are not present in the HP agreement.
The three end-of-term options are; retain, return and exchange the car.
According to the retaining option, if you purchased a BMW on a PCP deal and want to retain the car even after two to three years of PCP payments, you are free to do so. All you have to do is pay the remaining amount as a final lump sum. Remember, this is an option payment, which is only paid if a customer wants to retain the vehicle. This is commonly known as a balloon payment or a Guaranteed Minimum Future Value (GMFV).
However, if you do not want to retain the car, you can return it without making this balloon payment. The third option allows the customer to exchange the car for a new vehicle or a new model. For this purpose, you have to sign a new PCP contract.
So, if you sign a PCP deal for your favourite car brand, you will have three end-of-term options. Meanwhile, in an HP contract, you have to pay the entire cost price cost in monthly instalments to become the permanent owner of the vehicle.
How Can You Identify Mis-selling of PCP Contracts?
Car finance deals are confusing, and no one has a complete understanding of the latest contract rules and regulations. Therefore, it is the utmost duty of the car dealer and the lender to inform the customer of the best possible solution.
If the car dealer, lender, or broker fails to educate their customer on the terms and conditions of the PCP contract, it can be considered as mis-selling. It will ultimately impact the finances of the customer and will cause him additional stress and financial instability. That is why customers can claim PCP car compensation on mis-sold PCP deals.
In a recent investigation by the Financial Conduct Authority (FCA) in the UK, the authority has noticed a series of PCP complaints against some lenders. They suspect that the PCP and HP contracts that were sold between 2007 and 2021 involved higher interest rates. This has greatly impacted many customers. The authority banned the practice of Discretionary Commission Arrangements (DCAs) in 2021. But cars that were purchased before the date can be considered for claim compensations.
How to Make a PCP Claim?
If you purchased a BMW on PCP car finance, or you purchased a Mercedes on PCP finance, you can make a BMW PCP finance claim or a Mercedes PCP claim. If you think you were overcharged on interest rates or the broker charged hidden commissions on your PCP contract, you can claim a refund.
The PCP claim process is simple, but it needs a valid reason to make a claim. If you are sure that you were mis-sold on your car finance deal, you can make a PCP claim with our PCP claim experts at Kingsley Marketing.
If you are not sure about your mis-sold deal, but you bought a car before 2021, you can check your claim eligibility for free from our website. We have a free online PCP claim-checking tool to verify your eligibility status for the PCP and HP claim. Once we identify the mis-selling issue, we will proceed with your complaint with our claim experts.
It is important to note that the PCP claim process is time-consuming. It involves some legalities. So make sure you have the supporting documents before you proceed with the claim process. Our experts are always ready to help you anytime, so consult us now!