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car finance claims , car finance PCP,car finance PPI

car finance claimsMost of us at some time have applied for car finance to help us get the car we really want. It doesn’t matter what company your looking at using this article should insure your not going to be making any car finance claims in the near future.

It doesn’t matter who you took the car finance out with. If it was within the last few years there’s a good chance that you were offered a way of protecting your payments in case you become ill or loose your job.

That protection offered is payment protection insurance also known as PPI.It was offered to make sure you didn’t miss an installment on your loan.

When you took out your car finance you should have been filled out a questionable on behalf of the lenders. This was designed to check your eligibility for a PPI policy. How ever over the course of your loan circumstances may change. For example you find a new partner who would temporarily  cover your loan payments if required. Therefore you PPI policy would no longer be required.

Were you made aware that you could choose different providers for your Car finance PPI policy?. Choosing a provider who better fitted your needs and may have even been cheaper. There are plenty of providers out there and you are not duty bound to take out your policy with the suggested provider.

Like all other policies you need to check the small print as it will lay down strict terms. It will have circumstances listed which may lead to payouts. There are usually exclusions listed in the policy so you should make yourself aware of these before trying to make any car finance claims.

Use Caution

Consumers should always be advised to check the small print of car finance policy’s before signing and committing to take out what is a long term financial commitment. Don’t be pressured into signing anything. If you need to take some time before signing the documents no company worth dealing with would pressure you into signing there and then.

PCP (Personal Contract Purchase) An explanation

Pros: Lower monthly repayments when compared to a more traditional hire purchase agreement also PCP offers more flexibility with repayments

Cons: More traditional Hire purchase agreements are cheaper if you want to own the vehicle at the end of the term. PCP deals also impose financial penalties for higher than contracted mileage and a failure to up keep the vehicle as mandated.

PCP deals have gained popularity over recent years and most manufactures and dealerships in the UK offer them.

When taking out a PCP deal you pay a percentage of the vehicles price as a deposit and then follow this up with monthly instalments similar to a loan, how ever these monthly repayments are smaller than other vehicle purchase plans as at the end of your deal you pay a final balloon payment before taking ownership of the vehicle.

You don’t have to pay the balloon payment in your PCP deal though. Once you’ve completed all the monthly payments you’ll usually have paid off around a third of the cost of the car and you effectively have three options. The first is to hand over the final payment and take ownership of the vehicle, the second is to simply hand the car back and walk away and the third is to trade the car in and start a new deal on a new car.

Borrowers wont always pay the balloon payment at the end of their term. Usually by the time of the final payment they will have paid off around a third of the cost of the vehicle and then have three options

1 Hand over the final payment and they own the vehicle out right.
2 Take the vehicle back to the dealership and walk away.
3 Trade the vehicle in and start a new contract with a new vehicle.

PCP deals are similar to leasing a car but the the end of the term the option to own the car is available. The flexibility offered with PCP deals has roved popular over recent years with UK consumers.

When the PCP deal is being negotiated the dealer should give a “Guaranteed Minimum Future Value” for the vehicle . This is the amount the vehicle would be worth at the end of the PCP agreement. It gives consumers some protection if the vehicle unexpectedly drops in value. If the value of the vehicle increases this increase can be used as the deposit for the next PCP deal.

Manufactures push PCP deals to the public and keep the interest rates lower to make them more appealing, however buyers also need to be aware of mileage limits and the need to maintain the car in line if the manufactures service schedules so as not to incur further penalties.

If consumers wish to take ownership of the vehicle at the end of the deal then PCP could well prove to be more expensive than a hire purchase agreement but for people looking to hand back or trade in the vehicle it can be a great option.

There has been some controversy in the press lately regarding PCP claims and  PCP miss-selling we will keep you updated as mire information on these issues comes to light

Could car-buyers’ PCP become the new PPI? Claims lawyers look into the mis-selling of finance deals

Ready yourself for a new wave of phone calls from claims lawyers telling you that you could be entitled to hundreds of pounds in compensation.

That’s because they’ve started to investigate the mis-selling of PCP car finance deals, according to the National Association of Commercial Finance Brokers.

The NACFB said lawyers have begun to scrutinize dealers and finance firms on whether customers were correctly informed about the higher interest rates for PCPs compared to hire purchases and the issue of holding equity in the car.

With the volume of Payment Protection Insurance cases drying up, claims lawyers have turned their focus to the consumer finance industry, specifically PCP, the NACFB said.

It’s certainly a lucrative proposition for claims firms, with an estimated one million cars sold on PCP deals last year alone.

The potential for mis-selling relates to insufficient, poor or, in some cases, deliberately misleading advice given by car dealers and finance firms when recommending PCPs to car buyers, both new and second-hand.

The NACFB said two criteria are currently being investigated by layers.

Firstly, it believes few car owners taking out a PCP, whether for private or business reasons, were warned that, over the term of the loan, they would be paying considerably more in interest than they would if they purchased their vehicle under a hire purchase (HP) agreement.

And it also understands that car salesmen have told prospective buyers considering PCP that they will be in equity at the end of the contract, as the car is likely to be worth more than the final optional ‘balloon payment’ figure.

Lawyers are said to be looking into whether they inform the prospective buyer that this ‘profit’ will then help towards the down payment on the next car. 

Graham Hill, board member and car finance expert, NACFB, said: ‘If the PPI claims lawyers conclude there is enough basis to put forward a mis-selling case on PCPs then, given the huge volumes in which these products have been sold to both private individuals and businesses, the car finance industry could be shaken to its roots.

‘While the PCP in itself can be an appropriate solution for many car owners, as it reduces the monthly payments quite significantly, the issue lies with the way these products have been sold.

‘Were people made aware of the increased interest rate charges on PCPs relative to hire purchase agreements, and were they misled about the prospect of equity, either deliberately or out of dealer naivety?

‘In the majority of cases, I suspect ignorance and confusion among dealers is to blame.

‘But this will not help them and the finance providers behind them if, in the months ahead, PCPs are judged to have been mis-sold.

‘In the event that this happens, a significant number of consumers and business owners could be in for a sizeable cash windfall from the cars, motorcycles and vans they have purchased.’

PCP finance is in the sights of claims lawyers, claims broker trade body

PCP motor finance could be the subject of the next mis-selling scandal if sales executives haven’t been clear at the point of purchase, warns The National Association of Commercial Finance Brokers.

It believes claims lawyers have turned their focus to the consumer finance industry now that PPI mis-selling cases are drying up, and it suggests PCP may be at risk.

And it has accused franchised dealers and captive finance companies of giving insufficient advice on PCP interest structure and likely equity.

Graham Hill, board member and car finance expert, NACFB, said: “If the PPI claims lawyers conclude there is enough basis to put forward a mis-selling case on PCPs then, given the huge volumes in which these products have been sold to both private individuals and businesses, the car finance industry could be shaken to its roots.

“While the PCP in itself can be an appropriate solution for many car owners, as it reduces the monthly payments quite significantly, the issue lies with the way these products have been sold.

“Were people made aware of the increased interest rate charges on PCPs relative to hire purchase agreements, and were they misled about the prospect of equity, either deliberately or out of dealer naivety?”

“In the majority of cases, I suspect ignorance and confusion among dealers is to blame. But this will not help them and the finance providers behind them if, in the months ahead, PCPs are judged to have been mis-sold.”

 

source

Will PCP car finance evolve into the next claims management PPI scandal ?

PCP car finance clients may have to brace themselves for the onslaught of claims management companies asking them to claim large sums of compensation for their PCP car finance packages

Claims management companies and solicitors have banded together to test the miss selling of PCP car finance deals and with more then a million PCP car finance deals completed in the UK last year this seems like a lucrative opportunity for the all involved barring the finance companies.

The possible claims and current investigations. are based on the assumption that PCP clients were incorrectly informed regarding the higher interest rates charged for PCP finance and the amount of equity in the vehicle

Banks are now on thew whole administering PPI cases in house which means the claims management companies handling PPI claims are looking for new options. The Miss-selling of PCP car finance as with ppi relates to seller giving bad or incorrect advice at the point of sale. With PCP being a product available for both new and used cars you can see that the market is huge

The next aricle on this site will outline some points for PCP clients to look at and determine if they think there finance has been miss-sold and how to initiate a PCP car finance cliam.