Car finance is an extremely common topic in the UK. Most buyers purchase cars on finance via trusted financiers. There are tons of leading car finance companies providing flexible financing options to their customers. Capita Finance Services is also a popular choice among Britishers. Their car financing options are designed to meet the various needs of the customers.
Many individuals want to own a car that is far beyond their financial limitations. However, car financing options offer some feasibility and hope to those individuals. For instance, if you want to own the latest model of Peugeot, you can get it by signing a car financing agreement. If you are mis-sold on the car deal, you can make a Peugeot PCP claim. There are two types of car finance agreements: Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements. Let us uncover them in detail.
PCP and HP Car Finance
Personal Contract Purchase (PCP) is similar to a Hire Purchase (HP) car contract. Both of the contracts involve an initial deposit followed by a monthly payment plan. In an HP contract, the monthly instalment amount is fixed for the entire term period, and after completion, the contract holder becomes the owner of the vehicle. Meanwhile, in a PCP contract, the monthly payment amount is comparatively lower than the HP instalment. It is easier for customers to pay PCP instalments than HP instalments. Furthermore, a PCP contract offers more end-of-term options than an HP agreement.
There are three end-of-term options:
- retain,
- return, and
- exchange the car.
If the customer wants to retain the car at the end of the PCP contract, he will have to make an optional final payment, also known as a balloon payment. This is also referred to as a Guaranteed Minimum Future Value (GMFV). After paying this amount, the contract holder will become the owner of the car at the end of the PCP contract. Otherwise, he can return the car without making this payment.
Furthermore, the customer can also get a new car at the end of the PCP contract by signing a new PCP deal. The remaining amount will be adjusted by the dealer or the broker in his new contract. These are some benefits of a PCP contract that are not available in an HP contract.
How to Identify Mis-Sold Car Finance?
A mis-sold car finance deal consists of a lack of information by the customer about the contract. PCP contacts are tough and complicated. Most customers need financial guidance and professional advice before signing any major deal. Therefore, it is the utmost duty of the car dealer, broker, or lender to inform all important details about the financial agreement with the customer. If they fail to educate the customer on the car finance agreement, it can be considered mis-sold car finance.
Mis-selling can happen if the customer is not informed about the terms and conditions of the PCP or HP contract. Suppose the customer was not aware of the final balloon payment, interest rates that were charged on the contract, and commissions earned through their contract. If the broker fails to provide a complete breakdown of the total costs of the PCP or HP contract, the customer can claim a refund on the mis-sold car deal.
Furthermore, if the customer was not informed about the mileage restrictions, wear and tear costs, and the car’s condition, it can be considered a mis-selling. If the salesperson pressured the customer to sign the PCP deal, this can also be considered mis-sold car finance. Customers should be given time and proper guidance about the best financial services that suit their needs.
If you bought a car on finance from Capita Finance Services and think you might have been mis-sold on car finance, you can follow up with our PCP claims solicitors.
FCA PCP Mis-Selling Claims
Before moving on, let us consider the revelation of mis-sold car deals by the Financial Conduct Authority (FCA). In 2021, the FCA banned the practice of Discretionary Commission Arrangements (DCAs). FCA found out that many lenders were charging excessively high interest rates and hidden commissions as a strategy for increasing their profit gains from PCP contracts. Customers were unaware of such tactics as they considered them part of DCAs. As a result, many customers were mis-sold on their PCP contracts, and they faced enormous financial stress. That is why the FCA banned the practice of DCAs and started a formal investigation into mis-sold car deals.
Make a Claim with Kingsley Marketing
If you think you have been mis-sold on your car finance deal you signed before 2021, you can make a PCP claim with Kingsley Marketing PCP claim experts. We have a team of PCP claim experts who are trained to handle all sorts of mis-selling cases.
We have a simple and easy PCP claim process. Furthermore, we study your case, identify the reason for your mis-selling, and then proceed with your claim status. If you are eligible for a PCP claim, we will forward your request to the relevant authorities and update you on your refund amount. We do not charge any hidden fees.