Have You Been Mis Sold Car Finance PCP?
Purchasing a new car hurts the pocket, luckily, there are different car finance deals available, so paying it in one big payment is unnecessary. While this finance option seems like a good solution, it is essential to look more into the offer’s details. When the monthly payments are low, these finance options are sometimes mis-sold to customers; as a result, customers pay more than 50% more than they should for their car financing.
Most car finance deals are based on hire-purchase and Personal Contract Purchase (or PCPs). A PCP claim is like personal loans in that you pay back an agreed amount over a set period (usually 2-4 years for cars). Calculate the loan amount based on the depreciation value of the vehicle. If the customer chooses to make a single payment for the car after the loan period ends, they would be able to own it outright. The customer can pay a sum that is equal to the estimated value of the car.
Despite popular misconceptions, PCP car finance does not entail paying off the vehicle’s value as part of your loan. Rather than paying off your car loan, the payments pay off the difference in its value from when you purchase it until when your contract expires. If over the course of the contract, the car’s value decreases by £4,000, you will pay that amount in total via monthly payments as well. Even after paying monthly, you are still not considered as the car owner.
You can either offer the vehicle back at the end of the contract hire or pay a lump sum if you wish to keep (and therefore own) the car. In this case, the payment is referred to as a balloon payment. The PCP car finance deal is a very popular form of credit because it allows people to afford new cars. As an example, consumer car loans amounted to £28 billion in 2012. Just four years later, that figure rose to £58 billion. Interestingly, the motor finance market is only second to the mortgage market in lending.Claim against your pcp