Personal Contract Purchase (PCP) is one of the most popular ways to finance a car in the UK. While it offers flexibility and lower monthly payments compared to traditional car loans, many consumers don’t fully understand the terms, leading to unexpected costs and even mis-selling. If you've taken out a PCP agreement, it's crucial to know how it works and whether you may be entitled to a refund for unfair charges or mis-sold finance.
How Does PCP Car Finance Work?
PCP is a type of car finance where you make monthly payments over a fixed term. However, unlike a standard loan, you don’t automatically own the car at the end. Instead, you have three options:
1️⃣ Return the Car – Hand the car back with no further payments (as long as you haven’t exceeded the mileage limit or caused damage).
2️⃣ Make the Final Balloon Payment – Pay a lump sum (Guaranteed Future Value) to keep the car.
3️⃣ Trade It In for a New Car – Use any positive equity as a deposit for another finance agreement.
Key Terms in PCP Agreements
✔ Deposit Contribution – A sum often offered by dealers to lower your monthly payments.
✔ Guaranteed Future Value (GFV) – The pre-agreed price of the car at the end of the term.
✔ Balloon Payment – The lump sum required to own the car outright.
✔ Annual Mileage Limit – If exceeded, you may face additional charges per mile.
Common Issues with PCP Finance Deals
Many consumers enter PCP finance agreements without being given full transparency about fees, charges, or how much they’ll truly pay. Some of the most common problems include:
🔹 Undisclosed Commission – Many dealerships received high commissions from lenders without informing customers.
🔹 Inflated Interest Rates – Some lenders increased interest rates to boost dealer profits.
🔹 Unclear Terms & Conditions – Many consumers were not properly informed about balloon payments, excess mileage charges, or penalties for early termination.
Were You Mis-Sold PCP Finance?
You may have been mis-sold a PCP finance deal if:
✔ The dealership did not explain the total cost of the agreement properly.
✔ You were not told about commission payments to the dealer.
✔ You were pressured into signing a deal without understanding the balloon payment.
✔ Hidden fees, such as excess mileage charges or early termination fees, were not disclosed.
How to Claim a PCP Refund
If you believe your PCP finance deal was mis-sold, you could be entitled to a refund or compensation. At PCP Refund Claim, we specialise in helping customers claim back what they’re owed.
🔹 Step 1: Submit a free claim assessment on our website.
🔹 Step 2: Our team will review your case.
🔹 Step 3: If eligible, we’ll handle the claim process for you – No Win, No Fee!
Start Your PCP Claim Today
Car finance mis-selling is more common than you think. If you’ve been affected, don’t wait—check if you’re eligible for a refund today!
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