Personal Contract Purchase (or PCP) finance agreements have helped millions of drivers in the United Kingdom get behind the wheel of a new car. With low monthly payments, flexible options at the end of the term, and the option to return the vehicle, these deals have swiftly become a handsome solution for drivers with limited funds.
But more of these drivers are learning that their PCP finance agreements have been mis-sold. Buyers have been put in precarious financial situations by hidden fees and commissions that have been made possible by a widespread lack of transparency among lenders and dealerships.
On the bright side, UK law offers strong safeguards for consumers’ welfare. If you believe that your PCP deal was mis-sold, you may be aptly compensated by filing a PCP finance claim.
Why File for PCP Car Finance Claims?
Signing a mis-sold agreement, especially with lenders like Black Horse Finance, will likely cost you far more than what you anticipated. Many consumers have filed Black Horse Finance claims after discovering they were charged undisclosed commissions and inflated interest rates. If you have an agreement with Black Horse, now is the time to review your contract and determine if you are owed a refund.
Aside from giving you compensation for the faulty deal, filing a PCP car finance claim serves another purpose—one that benefits not only yourself. When you make a claim, you publicly challenge misleading practices in the car finance industry, holding lenders and dealerships accountable. Doing this helps ensure that future buyers receive fairer and more transparent deals.
Key Legal Grounds for Filing a PCP Finance Claim
Several legislations currently exist under UK law, primarily to protect consumers like you from unfair finance agreements. Here are some of the most important ones to take note of:
Consumer Credit Act 1974
The Consumer Credit Act 1974 is foundational to the consumer protection law in the UK. It exists to control credit agreements, including PCP deals, and make sure they’re fair for all UK consumers.
Under the CCA, consumers have the right to full and clear information, which means lenders are legally mandated to provide complete details about interest rates, total costs, and financial risks.
If the dealer is proven to have misrepresented a deal, Section 75 of the CCA states that the lender may be held jointly liable for any losses.
Financial Conduct Authority regulations
The Financial Conduct Authority (FCA) plays an important role in regulating car finance agreements, among other financial services in the UK, to ensure that consumers are fairly treated. In 2021, the FCA banned discretionary commission arrangements, which previously allowed brokers to hike interest rates for personal gain.
Per FCA regulations, lenders and dealerships must be transparent in explaining the financial product in a way the consumer fully understands. FCA also demands that no misleading information be used throughout the PCP agreement. If a dealer or lender is found to have provided false information about the costs or risks involved, this could form the basis of a claim.
Breach of contract
PCP agreements are legally binding contracts. If a lender or dealer fails to meet the agreed terms — such as applying unexpected charges, changing payment terms, or withholding essential information — this could be considered a breach of contract, making the agreement questionable.
Violation of transparency
If you were not made fully aware of extra fees, inflated interest rates, or the full cost of ownership, this lack of transparency could form the basis for a legal claim.
Qualifying for a PCP Car Finance Claim: How to Recognise Mis-Sold Agreements
Most consumers often do not immediately realise when they’ve been mis-sold a PCP car finance deal. It’s critical to recognise the following warning indicators in order to prevent this from occurring or to determine whether you have a legitimate PCP claim:
- The dealer pushed the deal, even if it wasn’t appropriate for your financial circumstances.
- You were under pressure to sign a PCP agreement before you had had the opportunity to carefully read the conditions.
- The contract contains strict mileage limits that were not fully disclosed to you and that, if exceeded, result in costly fines.
- Additional charges or rate hikes were not disclosed at the onset.
- The dealer received a commission for arranging your deal and did not disclose this to you.
If these seem reminiscent of your current situation, but you’d rather receive further professional advice to validate your suspicions, you may consider undergoing a PCP claim check service to help you determine whether you should pursue a claim.
How to Submit a PCP Finance Claim
Ready to file a PCP car finance claim? To assist you with the procedure, below is a detailed guide.
1. Examine Your Contract
Start by carefully reading your PCP contract and noting any phrases that seem ambiguous or confusing to you. Additionally, pay special attention to any provisions that allude to unstated commissions or hidden costs. These will form the basis of your argument.
2. Collect Proof
You will need tangible evidence to support your claim, so gather all the paperwork pertinent to the PCP agreement. Your name and policy number, the date of the contract, the vehicle number, and your address at the time of signing are important information that you must provide.
For your evidence, you should also get a hold of the following documents:
- Your signed agreement
- The initial disclosure document
- Any pre-contract information, such as quotes, that the lender or dealer provided
- Standard European consumer credit information
- Text messages, emails, or any other written correspondence with the lender or dealer
- Any additional details the lender or dealer may have supplied
- Your payment history, particularly if there were any unforeseen fees
3. Bring a Complaint to the Lender or Dealership
To formally complain about a car financing lender or dealer, write to them explaining why you believe your loan was mis-sold. Present the supporting documentation you have gathered and request a remedy, such as the agreement being canceled or the unfair charges being reimbursed.
4. Involve the Financial Ombudsman Service
The lender will have eight weeks to resolve the issue. If they make no effort to address it within that timeframe, you can take your complaint to the Financial Ombudsman Service (FOS). The FOS will conduct an independent review of your case.
5. Seek Professional Claims Assistance
If you need further support, consult PCP claim check service providers like Reclaim247. Working closely with the country’s top car finance solicitors, the team specialises in handling mis-sold PCP claims in the UK. You can expect them to examine your contract, evaluate your situation, and assist you in completing the claims procedure successfully.
The Next Step
Many drivers are trapped in tricky, unfair circumstances brought about by mis-sold PCP finance agreements, but you need not be one of them. Understanding your legal rights is a crucial first step to taking action, protecting your financial interests, and holding lenders accountable for malpractice.
Make it a point to review your contract to check for any questionable terms, gather the necessary evidence to back your PCP finance claim, and file an official complaint with your lender. If you require help at any point in the claims process, reach out to a PCP claims company for assistance and for checking your eligibility.