Understanding PCP Claims: A Beginner's Guide

Personal Contract Purchase (PCP) agreements have been a popular way to finance cars in the UK. However, not all PCP deals were fair, leading to potential claims. This guide explains the basics.

What is a PCP Agreement?

A PCP deal typically involves paying an initial deposit, followed by a series of monthly payments over a fixed term. At the end of the term, you have three options:

1. Pay a final "balloon" payment to own the car.
2. Return the car (subject to mileage and condition).
3. Part-exchange the car for a new one, using any equity as a deposit.

Why Might a PCP be Mis-Sold?

Mis-selling can occur in several ways:

• Hidden Commissions: Brokers or dealers might have earned higher commissions by increasing interest rates, without your knowledge (this is the focus of the current FCA investigation).
• Lack of Affordability Checks: The lender didn't adequately assess if you could afford the payments.
• Poor Explanation: The terms, risks, and options (especially the balloon payment) weren't clearly explained.
• Pressure Selling: You were pressured into an unsuitable agreement.

How Claimsquid Can Help

At Claimsquid, we help you understand if your PCP agreement might have been mis-sold. Our free Claim Checker tool is the first step. If you have a potential claim, we can guide you through the process on a No Win, No Fee basis.