Personal Contract Purchase (PCP) is a popular form of car financing, especially for luxury cars in the UK. It is highly demanded due to its flexible payment procedures. Most individuals prefer buying cars on PCP contracts for their daily use. BMW is one of the most owned cars in the UK. It is renowned for its performance, luxury and high technology. That is why millions of Britishers purchased BMW on PCP finance in the past ten years.
However, the finance protocols were different at that time. Many car financiers or lenders practised Discretionary Commission Arrangements (DCAs). Discretionary commissions might be hidden from the customers. The customer might not be aware of the profits that the lender and the dealer are making via the financing deal. It comes under a conflict of interest and is now banned by the Financial Conduct Authority (FCA). However, some lenders used hidden commissions to gain personal benefits. It is against customer rights, and thus, the consumer rights activists, such as Martin Lewis, are focusing on BMW PCP finance claim.
This article will provide an overview of the PCP contract and how to make a car finance claim.
PCP vs HP Finance
A Hire Purchase agreement is similar to a Personal Contract Purchase in terms of initial payment and monthly deposits. However, monthly deposits are higher in HP finance, whereas PCP finance offers lower monthly payments.
Furthermore, HP finance does not include a final balloon payment, and the customer takes ownership of the car. A PCP deal offers three end-of-term options, in which the final payment is optional.
The customer is presented with three options,
- Own the car
- Renew the model
- Return the car
If a customer wants to own the vehicle, he can pay the remaining amount and get its full ownership. For that reason, he has to make a final lump sum payment, also known as the balloon payment or Guaranteed Minimum Future Value (GMFV). This value is calculated based on the value of the car at the end of the term.
If a customer does not want to make any more payments or if he is not interested in buying the vehicle, he can opt out of this option. But he has to pay for any additional expenses that might have occurred as a result of using the car, such as mileage costs and wear and tear expenses.
Lastly, the customer has the option to get a new model by signing a new PCP deal. The new contract will adjust his remaining amounts.
What’s New About Mis-sold Car Finance
Now, you must be wondering how a customer can sign a mis-sold PCP contract. Well, that is not a big deal. Anyone could be mis-sold car finance. The reason is that the PCP contract is tricky and intricate. It is uncommon for all customers to read and understand it correctly.
A PCP deal offers many options, but not all customers are aware of their fair rights. Some get confused and dismiss the essential details of the contract, which increases their stress and frustration.
For your information, here is a list of possible reasons for a mis-sold BMW.
- The purchaser did not understand the PCP contract.
- The purchaser was not informed about the terms and conditions of the contract.
- The purchaser did not know the interest rates that were charged on the contract.
- The purchaser was not aware of hidden charges, fees, or commissions.
- The purchaser was not familiar with the car’s condition, mileage restrictions and wear and tear costs.
- He did not know about the final payment plan.
- The salesperson pressured him to sign the deal.
- He was not given other suitable financing deals.
It is the ultimate duty of the car dealer, lender, and broker to educate the customer on the pros and cons of signing the PCP deal. Most BMW buyers did not get their rights on BMW PCP deals signed between 2007 and 2021. The FCA stated that most of the PCP deals during this time were mis-sold as they included hidden charges and higher interest rates. It means that millions of BMW buyers were unfairly charged high on their PCP contracts. That is why they should file for a BMW PCP finance claim.
It is not tough to hire PCP claim experts to handle your reclaim complexities. Auto Fund is a well-recognised organisation handling all cars PCP claims, including Mercedes PCP claim.
How to Make a Car Finance Claim
Proceeding to the last part of the PCP claim process. A PCP claim or a car finance claim has three essential steps.
- Check your eligibility
- Collect evidence
- File your claim
All PCP contract holders who are paying or paid amounts on 2007-2021 PCP deals should check their eligibility for a refund. Checking the claim eligibility is the first and foremost important step in making a successful claim. It should be based on valid reasoning and should be supported with proper evidence. The complainant should have all relevant materials as supporting evidence for his PCP claim. This may include receipts, contracts, documents, e-mails, and marketing materials. Any sort of misinformation can be used for the claim process.
Secondly, the eligibility check should be carried out by the complainant himself or a PCP expert. We are offering free assessments and eligibility checkers on our official website. You can find it on Auto Fund’s main page as well.
Once you are eligible to file a complaint, we can proceed with the process. We are highly trained at handling all sorts of PCP claims. Our team is qualified to tackle the legal complexities of the contract. We do not charge any fees. Once you win a refund, we get some compensation from it. For more information, you can talk to us for free.