‘Misleading’ Car Finance Deals under Fire as Complaints Soar
In recent years, more and more people have started taking loans for their car finance. Companies and banks have continued handing out loans despite the credit score of customers. As the number of people taking loans increases so does the number of complaints. Many customers are now unsatisfied with their car finance packages and are raising many complaints.
Over the last year, many companies dealing with complaints about loans have seen an increase in the number of complaints. One such company, Resolver, a consumer advice provider, acknowledges that PCP and such car finance contracts make up a huge chunk of the 8,000 cases they handle.
PCP Loans being Mis-Sold
Personal Contract Purchase (PCP) loans have increased a great deal. They allow customers an alternate easier method of car finance instead of the traditional purchase method. In PCP loans, customers pay an initial amount and then monthly payments for a fixed duration of time. Customers can even back out of PCPs when they want to change the current car for a new one. Sounds good right? But PCPs are easy to mis-sell, and most companies do mis-sell them. Customers just sign the PCP without fully understanding it in the first place. All of this combined leads to complaints about the loan in the future.
The PCP offers to look tempting, but in reality, they’re not that amazing. The monthly deposits seem small and affordable. But that’s because they are based on the company’s future value. That value can increase a great amount, resulting in an increase in monthly payments too. Customers fail to notice this technicality and are simply attracted by the affordable monthly payments.
In the end, it rests on both the parties. Car manufacturers and banks both should market their loans more honestly. And customers should also pay more attention to what they’re signing up for.