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VW PCP Claim: What UK Consumers Need to Know About Mis-Sold Car Finance

Volkswagen, also known as VW, is a renowned global automotive brand. It is famous for its quality, innovation, and style. The brand has become a symbol of reliability and performance in the automotive industry. VW has an outstanding market share in the UK motor vehicle industry. Individuals prefer buying VW on car finance deals. The most popular car finance agreements are the PCP and HP agreements. 

A personal contract purchase (PCP) agreement is similar to a hire-purchase (HP) contract. However, there are some payment differences between the two car financing contract options. Customers who buy cars on finance frequently opt for a PCP deal. In case, someone thinks he has been mis-sold on his VW PCP contract, he can make a VW PCP claim. This blog will explore the benefits of PCP finance, information about different types of mis-selling and how to make PCP claims.

Why opt for a PCP car finance?

A car finance agreement helps the consumer to purchase an expensive vehicle without worrying about the total cost of the car. Let us suppose you want to buy a VW, but you do not have enough money to make this purchase. You can always opt for a car finance contract. Many companies offer PCP and HP deals to their customers. 

In a PCP deal, you have to pay an initial amount and then make regular monthly payments until the end of the contractual term. At the end of the two or four years of the PCP contract, you have to choose from the three options. You can retain the car, return the car, or exchange it for a new one by signing a new PCP deal. 

If you opt to retain the vehicle, you have to make an optional final payment, a balloon payment. It is a final lump sum or the Guaranteed Minimum Future Value (GMFV) that you will pay to own the vehicle. If you do not want to own it, you may return it without making any additional payments. 

Furthermore, if you want to upgrade the car’s model, you can sign up for a new PCP contract and get a new model. These options are only available in the PCP contract. 

Meanwhile, in an HP contract, you make an initial deposit followed by monthly payments until the entire cost of the car is paid off. You do not need to make a final balloon payment. An HP car finance agreement is also a good option. The customer should be familiar with the costs and benefits associated with car financing deals. Otherwise, he might be mis-sold on car finance contracts.

How is Car Finance Mis-Sold?

Car financial contracts can be mis-sold by incomplete and inaccurate information. If this happens on a VW PCP contract, customers can easily apply for a VW PCP finance claim. Here are some ways in which dealers might mis-sell customers on a PCP or HP deal.

  • The lender or the car dealer did not accurately inform you about the PCP or HP contract.
  • The lender or the dealer did not inform you about the car’s condition, restrictions, and mileage limitations. 
  • The dealer charged hidden commissions or high interest rates without mentioning it to you.
  • You were not clearly informed about the total costs and payment plan.
  • You had no idea about the final balloon payment.
  • The car dealer persuaded you to sign the contract immediately.
  • You were not offered the best financial product suitable for your needs.

You can always seek a PCP claim VW if you were mis-sold on your VW PCP contract. Similarly, if someone bought a BMW on a mis-sold PCP contract, he may apply for a BMW PCP finance claim

Recent investigations by the Financial Conduct Authority (FCA) have revealed that millions of PCP and HP contracts were mis-sold between 2007 and 2021. It happened because most lenders or car financiers were practising Discretionary Commission Arrangements (DCAs) on car finance agreements. This practice was not banned at the time. However, some misused this policy to earn higher profits or commissions on PCP contracts. This caused the customers to pay a higher interest rate than usual. Now, the authority has banned DCAs on PCP contracts. Those who purchased cars on PCP deals before 2021 can apply for a refund. So, if you are one of them, you can apply for a VW PCP claim.

How to apply for a Mis-Sold PCP Claim?

The PCP claim process is complex and time-consuming. If you are not sure of your PCP contract and think that you might be mis-sold on a car finance deal, you can always seek professional help. At Auto Fund, we have a dedicated team of PCP claim experts who can handle all PCP and HP claims processes swiftly. 

All you need to do is gather all relevant information and fill in your details on our online claim checking tool. Then, our experts will contact you regarding your claim process. It is important to note that we do not charge any fees until you win your refund. So, feel free to start your PCP claim process right now.