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Manufacturers could lock in customers to networks for servicing with PCP deals

The latest European Commission (EC) frequently asked questions (FAQs) on block exemption have uncovered the potential for manufacturers to lock customers in to franchised dealers for servicing if they have bought a car through a PCP (personal contract plan).

Miles Trower, TLT Solicitors director, told delegates at the AM Aftersales Conference: “PCPs have grown in popularity very quickly but I don’t know if the implications of the product have been properly thought out and explored.

“If you own the car you are within your rights to protect the residual value of that car.”

The ownership of the car on a PCP rests with the manufacturer finance house, until customers choose to purchase at the end of the agreement.

Under EC block exemption law, manufacturers could stipulate within the finance agreement that a car on a PCP must be serviced within the franchised dealer network to protect the residual value of the product.

Trower said: “EC FAQs aren’t hard law so it’s a question of which manufacturer will be brave enough to push forward with it.”

There could also be a potential customer pushback and negative press associated with limiting customer choice in where they get their car serviced, regardless of the legal rights manufacturers have when offering PCPs.

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  • John Murray - 29/04/2013 08:38

    Mercedes have been doing this for a while on Contract Hire too. Makes sense to keep the car genuine if you are the owner, after all as an OEM its your car they're putting cheap and nasty bits on if your not careful. If the consumer owns the car then its down to good marketing and excellent retention tools in the dealership and OEM

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