Personal Contract Purchase (PCP) car finance has become a popular way to buy a vehicle. However, many customers have mis-sold these agreements without fully understanding the terms. If you believe you were misled, you may be able to take legal action and claim compensation.
Understand Mis-Sold PCP Deals
PCP deals often include complex terms that many buyers don’t fully grasp. Some lenders and car dealers failed to disclose essential information, leading to financial losses. Common issues include undisclosed commission, unfair interest rates, and misleading affordability checks.
Signs You Have Been Mis-Sold a PCP Deal
- The dealer failed to explain how balloon payments work at the end of the agreement.
- You were not told about the commission the dealer earned from your finance deal.
- The lender did not check whether the monthly payments were affordable for you.
If any of these apply to you, you could have a valid claim. It is essential to gather evidence before taking action.
Step 1: Gather Evidence
Start by collecting all paperwork related to your PCP agreement. Check your finance contract, any emails or messages with the dealership, and payment statements. Look for missing details about commission, interest rates, and affordability assessments.
Step 2: Contact Your Lender or Finance Provider
Write a formal complaint to your lender explaining why you believe the deal was mis-sold. Use clear language and include all relevant evidence to support your claim. The lender has up to eight weeks to respond with a resolution.
Step 3: Escalate to the Financial Ombudsman Service (FOS)
If your lender rejects your complaint or does not respond within eight weeks, contact the Financial Ombudsman Service. The FOS investigates disputes between consumers and financial providers. They will assess your case and determine if you are owed compensation.
Step 4: Consider Legal Action
If the Financial Ombudsman does not rule in your favour, you can take legal action. A solicitor specialising in financial mis-selling can help build a strong case. Many law firms offer no-win, no-fee agreements, reducing your financial risk.
How Much Compensation Can You Claim?
The amount varies depending on your case. Successful claims may result in refunds of excess interest, reduced debt balances, or full contract cancellations. In 2023, the Financial Conduct Authority (FCA) reported that some claimants received thousands in compensation.
Legal Deadlines for Claims
There is usually a six-year limit for filing claims under the UK’s financial regulations. If your PCP deal was signed more than six years ago, you may still have a case if you only recently discovered the mis-selling.
Final Thoughts
Mis-sold PCP finance can lead to financial hardship, but legal options exist to reclaim your money. Start by gathering evidence and filing a complaint with your lender. If necessary, escalate your claim to the Financial Ombudsman or seek legal assistance. For those unsure about their next steps, researching car finance claims Martin Lewis has covered can provide useful insights and guidance on making a successful claim.
