Close Menu
    Latest Category
    • Finance
    • Tech
    • EU Law
    • Energy
    • About
    • Contact
    EUbusiness.com | EU news, business and politicsEUbusiness.com | EU news, business and politics
    Login
    • EU News
    • Focus
    • Guides
    • Press
    • Jobs
    • Events
    • Directory
    EUbusiness.com | EU news, business and politicsEUbusiness.com | EU news, business and politics
    Home » Why PCP could be the next PPI claims scandal

    Why PCP could be the next PPI claims scandal

    npsBy nps19 March 2020Updated:26 June 2024 No Comments2 Mins Read
    — Filed under: Focus
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Personal contact purchase (PCP) could emerge as the next PPI claim scandal, following a stark investigation into car finance products by the Financial Conduct Authority (FCA).

    Although PCP is used by 90% of UK motorists, issues have emerged over unaffordable balloon payments and car dealers may have been selling finance at a higher rate than necessary to earn large commissions.

    PCP is popular because it gives car buyers the chance to pay lower monthly payments with a large balloon payment at the end of the 3 or 4-year deal if they want to eventually own the car. However, many customers are finding themselves in negative equity and needing to pay an inflated balloon payment ? and are further away from owning the car outright, despite years of payment.

    An investigation by the FCA shows that the average motorist may have been charged in the region of £1,000 to £1,100 extra for their car finance ? and many are saying that the potential claims could mirror the PPI scandal that refunded over £50 billion from UK banks.

    Later this year, claimants may be able to apply for compensation for PCP in a similar way to PPI. Although this is yet to be confirmed and many claimants are awaiting more information from the FCA.

    Reflecting on the PCP scandal, we spoke to someone from Quick Car Finance who specialise in brokering hire purchase and no deposit car finance.

    “Until now, customers may have been overcharged by their car dealer who could freely charge more to earn more commission.”

    “The next issue is that your balloon payment could be greatly inflated. After all, doing more mileage or having any scratches or dents will make the outright purchase of your car more expensive ? as stated in the terms of your agreement. But does anyone really sit down with the dealer and provide an accurate figure on their mileage ? or is just an estimate? These things make a real difference.”

    “At Quick Car Finance, we prefer to offer hire purchase which means that every month you are paying and investing into your car which you will eventually own. With PCP, you are relying on a balloon payment in order to own your vehicle, but this could be greatly overpriced or poor value for money.”

    The FCA is still investigation the car finance industry and more information about claiming compensation will be outlined later this year.

    Add A Comment
    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    nps
    • Website

    Related Content

    Euro - ECB-Photo by Mika Baumeister on Unsplash

    UK pay growth slows, employee numbers fall – Euro currency news daily

    Budget pie chart - Photo by Pixabay

    Proposed MFF has potential to respond to current challenges

    Sponsor: SMEunited16 July 2025
    Wildfires - Photo by Pixabay

    Commission’s budget proposal delivers blow to climate and nature

    Sponsor: WWF16 July 2025
    Ursula von der Leyen - Photo © European Union 2025

    EU unveils 2 trillion euro Budget for 2028-2034

    Trade in cars - Photo by Tom Fisk on Pexels

    United States a major consumer of EU automotive industry

    Innovation - researcher - Image-by-Thomas-from-Pixabay

    Concern about innovation progress among EU Member States

    LATEST EU NEWS
    Euro - ECB-Photo by Mika Baumeister on Unsplash

    UK pay growth slows, employee numbers fall – Euro currency news daily

    17 July 2025
    Ursula von der Leyen - Photo © European Union 2025

    EU unveils 2 trillion euro Budget for 2028-2034

    16 July 2025
    Trade in cars - Photo by Tom Fisk on Pexels

    United States a major consumer of EU automotive industry

    16 July 2025
    Innovation - researcher - Image-by-Thomas-from-Pixabay

    Concern about innovation progress among EU Member States

    15 July 2025
    Internet safety children - Photo by Jonathan Borba on Pexels

    EU Commission issues guidelines for protecting children online

    14 July 2025

    Subscribe to EUbusiness Week

    Get the latest EU news

    CONTACT INFO

    • EUbusiness Ltd 117 High Street, Chesham Buckinghamshire, HP5 1DE United Kingdom
    • +44(0)20 8058 8232
    • service@eubusiness.com

    INFORMATION

    • About Us
    • Advertising
    • Contact Info

    Services

    • Privacy Policy
    • Terms
    • EU News

    SOCIAL MEDIA

    Facebook
    eubusiness.com © EUbusiness Ltd 2025

    Type above and press Enter to search. Press Esc to cancel.

    Sign In or Register

    Welcome Back!

    Login to your account below.

    Lost password?