AM Online

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

Doing the deal

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.”

Click here for finance and insurance best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


  • Barrie Reeves - 15/06/2016 12:03

    Thats why Eustace Wolfington the originator of Red Carpet Lease the forerunner of todays PCP designed the Comparison Example presentation which was fundemental to the teaching of Options by HAC trainers throughout the UK to Ford dealer sales staff and that was 25 years ago.

    • Nimrod - 15/06/2016 17:12

      I disagree because Eustace Wolfington wasn't the forefront on the molecular bond that was formed between HAC and the debate between whether they want to share the logbook at the time of cutting the cake thirteen years ago.

  • Rob Chisholm, Applewood Vehicle Finance Ltd - 15/06/2016 15:49

    Going back to the early 90's it certainly was mis-sold at dealership level. Particularly to those naïve customers who used the whole of their part ex as the Initial Payment, and thereby artificially reducing their monthly payments. Only to find two or three years later they don't have the same amount of funds to offer up as an initial payment on the next vehicle, meaning the monthly payments shoot up through the roof. As long as I have been in the Finance Broker market, some 23 years now, I believe that these products, generally, have been sold responsibly.

  • Kel - 15/06/2016 20:36

    PCP Is there nothing these ambulance chasers will not attack ??

  • peter brickles - 17/09/2016 16:10

    It seems there are already dedicated web sites being made fort he purpose of educating the public on possible pcp claims and miselling