Skip to content

Mis-Sold PCP? Know Your Rights and Recover Compensation

Personal Contract Purchase (PCP) financing is appealing to many because it lets them drive a brand-new car with manageable monthly payments. What do you do when the dream goes bad? Unfortunately, it’s becoming more common for PCP agreements to be sold wrong. This article gives you the information you need to look at your situation, understand the claims process, and maybe get back what’s rightfully yours.

Bringing to light the mis-sold PCP

When you get PCP finance, you can pay for a car over a set period of time. There is a final “balloon payment” at the end after the monthly payments. There are different ways to own the car, so you can either return it or use its value as a down payment on a new one. The problem comes up when lenders don’t look out for your best interests, which can lead to bad sales.

Here are some signs that you were sold the wrong PCP agreement:

A Web of Not Being: It’s possible that the lender didn’t fully explain the PCP agreement. Important details like interest rates, possible fees, and the amount of the balloon payment were still unknown.

Complications Not Visible: The lender either didn’t tell you about the commission they made from selling you the PCP deal, or they lied about it.

Affordability Issues: There wasn’t a proper affordability assessment, so you’re now stuck with a huge debt that you can hardly handle.

What Went Wrong: The lender pushed a PCP deal even though you would have been better off with a loan or another type of financing.

These are just a few examples of mis-selling. Mis-selling can look different in different situations.

Are you able to file a PCP claim?

If you bought a car in England or Wales with PCP finance in the last ten years, you may be able to get money back. Here are some things to think about:

Misrepresentation: Did the lender lie to you about the terms of the agreement or whether PCP would work for you?

Inability to pay back: Did the lender not check your ability to pay, making it hard for you to pay?

Pressure Techniques: Were you pushed to sign the contract before you fully understood it?

Remember that proving mis-selling is a big part of winning a claim.

Getting the Proof You Need for Your Case

Before you file a claim, you should get as much proof as you can. Among these are:

The PCP Agreement: This is the contract that lists the terms of your car loan, including the interest rates, the balloon payment, and the number of miles you can drive.

Sales Documents: Brochures, flyers, or emails sent to or from the dealership or lender could have false information on them.

Financial Records: Bank statements that show payments on a PCP loan are useful proof.

Communication History: Emails or recordings of conversations you had with the lender about the PCP deal can be very helpful.

If it’s hard to find certain documents, calling the lender is a good place to start.

Different Ways to File a PCP Claim

There are three main ways to pursue PCP car claims:

Making a direct complaint to the lender is the simplest way to do things. You can call the lender and tell them why you think they sold you the wrong PCP.

Financial Ombudsman Service (FOS): If the lender turns down your claim, you can take it to the FOS, which is an independent body that settles money disputes.

Claim Management Companies: There is a “no win, no fee” policy with these companies, which means they don’t get paid unless you win your claim. On the other hand, they usually take a cut of any money you get.

Before choosing the best thing to do, it’s important to think about the pros and cons of each choice.

The Claims Process Broken Down

The claims process can be different based on the route chosen. In short, here’s how it works:

Initial Assessment: The first step is to carefully look over your situation and gather evidence. The Citizen’s Advice Bureau or a lawyer can give you some initial advice.

Formal Complaint: Write a formal letter to the lender outlining your concerns and giving proof to back up your point of view.

Lender Response: The lender is looking into your claim and may offer a settlement if they agree that they are at fault.

How the FOS Works: You can take your case to the FOS if the lender rejects your claim or the settlement offer falls short of what you were hoping for. They will look at the situation on their own and make a decision that everyone has to follow.

Court Proceedings: In very rare situations, you may need to go to court. This is the way to go for claims that are complicated.

It could take months for the whole process to finish, so be ready to be patient.

Before you make a claim, things you should think about

As a general rule, you have six years from the date of the mis-selling to file a PCP claim. But taking action sooner makes your case a lot stronger.

Achievement Rates: The achievement rate for PCP claims varies based on the quality of your proof and the specifics of your case. Talking to a lawyer who is familiar with these claims can help you figure out how likely you are to win.

Costs: The FOS and the Citizens Advice Bureau offer free help, but legal advice and help from claim management companies usually cost money. Compare these possible costs to the possible compensation to see if it makes financial sense to file a claim.

In conclusion

PCP finance can be a great way to get a new car, but if you get ripped off, it can turn your dream into a financial nightmare. This guide gives you the information you need to look at your situation, understand the claims process, and maybe get back what’s rightfully yours. Remember that getting proof, learning about the different ways to file a claim, and carefully weighing the time and money needed are all important steps to take if you want to get your finances back on track. If you need to, don’t be afraid to get help from a professional. If you do something, you can hold lenders responsible for unfair behaviour and get back to enjoying the ride in your car.