Car Finance and PCP Glossary: Simplifying Complex Jargon with SortMyCash and Chan Neill Solicitors
Navigating the world of car finance and Personal Contract Purchase (PCP) can be challenging, especially with the complex jargon that often accompanies these agreements. At SortMyCash, in partnership with Chan Neill Solicitors, we’re dedicated to helping you understand the language of car finance and PCP claims. In this comprehensive glossary, we’ll define key terms and concepts to empower you with the knowledge you need to make informed decisions and pursue compensation claims for mis-sold car finance and PCP agreements.
Car Finance and PCP Glossary:
- APR (Annual Percentage Rate): The yearly cost of borrowing, expressed as a percentage. It includes interest and fees, making it easier to compare different finance options.
- Balloon Payment: A large, final payment due at the end of a PCP agreement if you choose to buy the car. Also known as the Guaranteed Minimum Future Value (GMFV).
- Car Finance: A broad term referring to various methods of borrowing money to buy a car, including Personal Contract Purchase (PCP), Hire Purchase (HP), and Personal Loans.
- Commission: A fee paid to car dealers or brokers by lenders for arranging car finance deals. If undisclosed, this could be grounds for a mis-selling claim.
- Equity: The difference between the market value of a car and any outstanding finance owed on it. Positive equity can be used as a deposit for a new car in a PCP agreement.
- FCA (Financial Conduct Authority): The UK’s financial regulator responsible for overseeing the conduct of financial services firms, including car finance providers.
- GMFV (Guaranteed Minimum Future Value): The pre-agreed minimum value of a car at the end of a PCP agreement. It’s used to calculate the balloon payment if you choose to buy the car.
- Hire Purchase (HP): A type of car finance that involves making monthly payments over a fixed period, after which you own the car outright.
- Interest Rate: The cost of borrowing money, expressed as a percentage. The interest rate on a car finance agreement determines the amount of interest you’ll pay over the term.
- Mis-selling: The act of providing incorrect, misleading, or incomplete information when selling financial products, such as car finance or PCP agreements.
- No Win, No Fee: A fee arrangement in which you only pay for legal services if your claim is successful. SortMyCash and Chan Neill Solicitors offer a No Win, No Fee service for car finance and PCP claims.
- PCP (Personal Contract Purchase): A popular form of car finance that allows you to make monthly payments for a fixed period, with the option to buy, return, or trade-in the car at the end of the term.
- Residual Value: The estimated value of a car at the end of a finance agreement. It’s used to calculate the GMFV in a PCP deal.
- Term: The length of time over which a car finance agreement is in place, typically expressed in months or years.
Legal and Claim Glossary
- Breach of Contract: A legal term referring to the violation of the terms and conditions of a contract, such as when a car dealer or finance provider fails to disclose essential information related to a car finance or PCP agreement.
- Duty of Care: A legal obligation requiring car dealers and finance brokers to act in the best interest of their customers when arranging finance agreements. Failure to meet this duty may result in mis-selling claims.
- Fiduciary Duty: A legal responsibility of a financial adviser, broker, or dealer to put their client’s interests first when providing advice or services.
- Financial Ombudsman Service (FOS): A free, independent service in the UK that helps resolve disputes between consumers and financial service providers, including car finance and PCP mis-selling claims.
- Fraud: Intentional deception to gain financial or personal advantage, such as misrepresenting information in a car finance or PCP agreement.
- Material Fact: An essential piece of information that, if withheld or misrepresented, could affect a consumer’s decision to enter into a car finance or PCP agreement.
- Negligence: A legal term referring to a failure to exercise the appropriate level of care or skill when providing advice or services, which can result in mis-selling claims.
- Redress: Compensation awarded to a consumer who has been wronged, such as through the mis-selling of car finance or PCP agreements.
- Remediation: The process of correcting a situation where a customer has been disadvantaged by a financial service provider’s actions, such as in cases of mis-sold car finance or PCP agreements.
- Statute of Limitations: A legal time limit within which a consumer must bring a claim for mis-sold car finance or PCP agreements. In the UK, this is generally six years from the date of the agreement or three years from the date you became aware or should have become aware of the mis-selling.
- Unfair Contract Terms: Terms and conditions within a car finance or PCP agreement that are deemed unreasonable or heavily favour one party, potentially leading to mis-selling claims.
- Bribe: A sum of money or other valuable consideration offered or given to someone, typically in a position of authority or trust, to influence their actions or decisions. In the context of car finance and PCP mis-selling, hidden commissions paid to car dealers or brokers can be considered a form of bribe.
- Rescission: A legal remedy that seeks to undo a contract and return both parties to their pre-contractual positions, effectively cancelling the agreement. In car finance and PCP mis-selling cases, rescission can be sought if it is proven that the contract was entered into based on misinformation or the concealment of material facts, such as hidden or secret commissions.
- Hidden / Secret Commission: A payment made by a lender to a car dealer or finance broker without the knowledge or consent of the consumer. In car finance and PCP agreements, hidden or secret commissions can lead to mis-selling claims if the consumer was not made aware of the commission and how it might impact their finance agreement.
Understanding the language of car finance and PCP claims is crucial when assessing your rights and pursuing compensation for mis-sold agreements. At SortMyCash and Chan Neill Solicitors, we’re committed to providing you with the knowledge and support you need to navigate the claims process with confidence. If you believe you’ve been mis-sold car finance or a PCP agreement, get in touch with our expert team to start your No Win, No Fee claim today.