Did you finance the purchase of your Mercedes, BMW, Audi, Volkswagen, or any other high-value car with a car finance agreement before January 2021? If so, you might have been the victim of a mis-sold car finance PCP deal, potentially entitling you to thousands in compensation.
Owning a Mercedes-Benz is a dream for many, but the financial pathway to that dream, particularly through Personal Contract Purchase (PCP) agreements, has been tainted by widespread allegations of misselling. This blog delves deeper into the complexities of PCP finance, the specific claims levied against dealerships, and the regulatory response aimed at protecting consumers.
If you suspect you were misled when purchasing your Mercedes with a PCP agreement, you may be eligible to file a Mercedes PCP claim.
Understanding PCP Finance
Personal Contract Purchase (PCP) is a popular financing option for acquiring vehicles, including luxury brands like Mercedes. Here’s how it works:
- You make a series of fixed monthly payments over a set term (typically 2-4 years).
- At the end of the agreement, you have three options available:
- Upgrade: Trade in your Mercedes for a new one and pay the final balloon payment.
- Part-Exchange: Use the equity built up in your Mercedes towards a new car’s down payment.
- Own the Car: Pay the final balloon payment to become the outright owner.
The Allegations of Mis-selling
Many who purchased Mercedes vehicles through PCP finance claim they were mis-sold these agreements. Here are the key allegations:
- Hidden Commissions: Dealerships allegedly earned undisclosed commissions by steering customers towards more expensive PCP plans. These commissions inflated the overall cost of the vehicle.
- Inflated Prices: The hidden commissions resulted in artificially inflated prices for Mercedes, as these additional dealer profits were factored into the total financial agreement.
- Lack of Transparency: Customers allege dealerships failed to fully disclose the terms and conditions of the PCP agreements, including potential hidden costs and their impact on the final car price.
The FCA’s Intervention
Recognising the widespread issue of mis-selling in the car finance industry, the Financial Conduct Authority (FCA) took steps to protect consumers:
- Ban on Hidden Commissions: The FCA banned car dealerships from earning additional commissions based on pushing customers towards higher-priced PCP agreements.
- Increased Consumer Protection: The regulator implemented measures to improve transparency and fairness within the car finance market.
- Enforcement Actions: The FCA took action against dealerships found to be engaging in mis-selling practices.
While the FCA’s actions address future concerns, many consumers who were mis-sold PCP agreements before the ban may still be eligible for compensation.
Common Affected Mercedes-Benz Models
Here’s a list of some commonly affected Mercedes-Benz models potentially involved in claims for mis-sold PCP agreements:
| A-Class Hatchback | GLC Coupé |
| B-Class Hatchback | GLE |
| EQE Saloon | G-Class |
| EQS Saloon | C-Class Coupé |
| A-Class Saloon | E-Class Coupé |
| C-Class Saloon | AMG GT Coupé |
| E-Class Saloon | C-Class Cabriolet |
| S-Class Saloon | E-Class Cabriolet |
| C-Class Estate | AMG GT Roadster |
| E-Class Estate | V-Class |
Check If You’re Due Car Finance Compensation
How can you determine if your car finance was mis-sold? If you financed a car before January 28, 2021, it’s essential to review the fine print of your agreement. Car finance deals from as far back as April 6, 2007, may be subject to review, as this is when the Financial Ombudsman began overseeing motor finance complaints. However, the exact parameters will likely be clarified in the FCA’s investigation.
The FCA has estimated that 95% of car finance deals involved a commission model, with 40% including “discretionary commission arrangements.”
Signs of a Mis-Sold Finance Deal
Whether all costs, particularly additional ones such as excess mileage fees, were fully and clearly explained.
- Whether proper affordability checks were conducted by the finance provider to ensure you could manage the repayments.
- If you find discrepancies in either of these areas, you might be entitled to compensation.
Note that the investigation focuses on Personal Contract Purchase (PCP) and Hire Purchase (HP) finance only. Leasing, known as Personal Contract Hire (PCH), and zero per cent interest packages are excluded.
Typically, only deals made with private buyers are considered, though some business purchases may also qualify based on specific circumstances. Claims can also be made on behalf of deceased individuals, provided the lender receives the will and grant of probate to direct the compensation appropriately.
Potential Compensation Amount for Mercedes PCP Claims
While compensation amounts are generally modest—given that you had the use of the car during the finance term—average payouts could reach up to £1,100, according to Lewis.
The FCA has assured that making a complaint or claim will not result in being blacklisted by the finance company or its affiliates. This practice, previously reported during the PPI scandal, has been prohibited by the Financial Ombudsman.
Start the Compensation Claim Process
Do you believe your Volkswagen, Land Rover, or Mercedes PCP finance agreement was mis-sold? Are you potentially owed compensation? So don’t worry, Goodwin Rodgers has introduced a free tool to assist you. Use this tool to check your eligibility, save time, and streamline the process.
If you purchased a car using PCP or HP finance between 2007 and 2021, you may be eligible to bring a Land Rover PCP claim or Volkswagen PCP claim. We will hold car dealerships and lenders accountable for mis-selling and seek compensation on your behalf.
Use our Mercedes PCP claim form to find out if you’re eligible for compensation today. You can even claim for multiple vehicles.