Personal Contract Purchase is ‘Overpriced’ as Average Motorist is Charged Over £1,000 Extra
Industry News | 22/06/20
A review earlier this year from by the Financial Conduct Authority (FCA) has highlighted concerns surrounding the UK’s most popular car finance method – personal contract purchases (PCP). PCP is currently used by around 90% of people who buy cars in the UK every year. This type of car finance is designed to provide motorists with affordable monthly payments, followed by a balloon payment at the end if the customer wants to purchase the car outright.
However, investigations into the industry by the FCA has highlighted two main areas of concern. Firstly, car dealers can very loosely change the APRs of car finance products to potentially earn more commission. Second, a lot of motorists are being talked into deals lacking transparency and are left with a balloon payment which is often unaffordable.
Source: Business Leader
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