What is PCP and how does it work?
A PCP deal is basically a loan to help you get a car. But unlike a normal personal loan, you won't be paying off the full value of the car and you won't own it at the end of the deal (unless you choose to). The deposit isusually around 10% of the car's value.
Monthly repayments are dictated by the length of the term of the plan, deposit, amount, annual mileage, and the car's total value.
At the end of the agreement there is an optional final payment, this is a pre-agreed figure which is determined in the PCP contract prior to starting the agreement, this figure is set out by the finance company which predicts the cars worth at the end of the agreement.
Key considerations we can investigate for you:
- Did you pay more for your motor finance because of the way the lenders incentivised the brokers/car dealerships?
- Were sufficient affordability checks carried out to ensure you could afford the product in question?
- Were you informed of the level of commission associated with setting up the finance and was there a conflict between lenders and the brokers/dealerships?
- Was the PCP contract properly explained? Were you aware of consideration such as balloons payments, extra mileage charges and that you would not own the vehicle until all sums have been paid?