Volkswagen is renowned for its iconic cars and engineering excellence. The company also offers a range of car financing options designed to make the owning process easy and accessible for all. There are other financiers in the UK as well, which provide PCP and HP finance to the Britishers. If you want to purchase a new or used VW car, you can do so by contacting the best option.
However, there are some things to discuss so that you opt for the best option. As you know, personal contract purchase, also known as PCP finance, is an easy car financing option that is available to all. Similarly, there is a Hire Purchase or HP finance option. There are some differences between the two car financing models, which we will highlight below.
It is essential to understand and evaluate each car financing model to avoid mis-selling claims. Recently, people have been claiming for mis-sold PCP and HP deals in the UK. If you purchased a VW or BMW, or any car before 2021, you might also be eligible for a refund. BMW owners can make a BMW PCP finance claim, and VW owners may claim a VW PCP claim.
In this article, we will examine everything about car finance claims.
What are Car Finance Agreements?
A car financing agreement is a contract between the buyer and the seller to sell an item for finance. A buyer is a person who wants to own a car, and a seller can be a financier, lender, or broker. The objective of the car financing agreement is to facilitate the customer to own his desired vehicle on affordable payment plans. These payment plans have been spread over the years to make the payment process easy and flexible for customers. The banks or the lenders charge a certain interest rate on the monthly instalments. This can either be a fixed rate or a variable rate.
Moving on to the types of car financing options, Britishers often opt for a PCP deal or an HP agreement. Both financing options include an initial deposit and a monthly payment plan. After clearing all payments, the customer becomes the owner of the car in an HP deal. Until then, he is just using the car but is not entitled to own it. Whereas, in a PCP contract, a customer does not own the car immediately after completing his monthly payment plan. He is offered three different options. He can choose to pay the remaining amount, or he is free to return the car without paying anything, or he can renew his contract with a new vehicle or a different model. These three options are known as, retain, return, and exchange, respectively.
Let us consider you as a customer who wants to purchase a VW on PCP finance. If you want to retain the vehicle, you have to pay the final amount, also known as a balloon payment, a residual value or a Guaranteed Minimum Future Value (GMFV).
This amount is only paid off by the customer if he is willing to become the owner of the vehicle. Otherwise, he is free to return it without paying anything. This option is considered as a return of your VW without paying the optional balloon payment. In the third case, you can exchange your car for a new one by signing a new PCP deal.
A PCP contract lets the customer decide on his plan. However, the customer should be familiar with the costs and benefits associated with all three options. Most customers are not aware of the complexities of a PCP contract and thus fall into a mis-sold PCP deal. However, in your case, you may make a VW PCP finance claim.
A VW PCP claim can only be made if you have been mis-sold on a PCP contract.
How is Car Finance Mis-sold?
A mis-sold car finance agreement is another trending topic in the UK’s financial market. Mis-selling happens when a lender or car dealer mis-sells a financial product to its customers. This implies a mis-sold PCP or HP contract.
When a lender or car dealer does not provide complete and accurate information about the car financing agreement to its customers, it is considered a mis-sold deal. In this case, a customer may make a claim and ask for compensation. Here are some of the common reasons for a mis-sold PCP deal.
- The lender did not provide complete information about the contract.
- The dealer did not offer the best financial product suitable for your needs.
- The broker charged hidden commissions that increased the total cost of the contract.
- You were not informed about the car’s condition and other mileage restrictions.
- They did not run a complete affordability check before finalising the deal.
- You were pressured by the sales team to sign the contract immediately.
There are various reasons for a mis-sold PCP contract. But recently, the Financial Conduct Authority (FCA) has found out that lenders were charging high hidden commissions on car finance agreements before 2021. They have banned the Discretionary Commission Arrangements (DCAs) from 2021. But customers who purchased old or new cars on finance between 2007 and January 2021 were most likely mis-sold on car deals.
This news has initiated a series of PCP claims for different car companies and their lenders. Customers who purchased VW on a PCP deal before 2021 can make a PCP claim VW.
How to Claim Compensation for Mis-Sold Car Finance?
Anyone can make a PCP claim on his new and old cars that were purchased on PCP or HP finance before 2021. Our team at Goodwin Rodgers is ready to assist you in making PCP claims on all cars. Our process is simple and easy. Our PCP and HP claim experts are trained to tackle all sorts of claim compensation cases across the UK.
Feel free to get in touch with our solicitors to claim your mis-sold car finance.