On paper, it feels like British car finance is in a very good place right now, with more people driving and the industry as a whole delivering a larger range of innovative, forward-thinking cars than ever before, which theoretically translates to a peak period for car finance. In reality, though, things are not what they seem, and that’s not only because British business in general is still uncertain due to the potential fall-out of a Brexit deal (or a no-deal Brexit, as it may be). More and more, we hear about people having being mis-sold PCP finance, so much so that today we pose the question: is Britain’s car finance heading for a mis-selling scandal?
Certainly, there have been many drivers who are suffering from being sold incorrect, poor or downright shady finance deals. Whether it be an oversight within the paperwork, a deal which doesn’t stack up to scrutiny when you break it down, or the dealer taking advantage of a client’s struggling financial situation, there are so many examples of situations where the consumer has been deliberately mis-sold PCP finance, but given the pressures of daily life, which include the need for a car at any cost (because they feel that they simply must have a car), the client is more likely to concede and end up paying far more than they should be, for a deal that is unfair to their situation.
This has been going on for too long, and it has unfortunately shown signs of becoming more frequent in recent years. Fortunately, the Financial Conduct Authority (FCA) are currently head-long into an investigation which is designed to identify and crack down upon instances where dealers are mis-selling finance deals, perhaps in great numbers and under extremely unsavoury circumstances. The investigation has been ongoing since July 2017, and it could be a long time before the FCA publishes its results, which at that point is expected to be a major news story within the automotive and car insurance industries.
In the meantime, though, the rise of social media, the question marks facing British motoring in general due to the Brexit confusion, and the general poor business practice shown by a worryingly high percentage of dealers, means that the you-know-what could hit the fan before then. The more that drivers report such malpractice, with clear evidence of wrong-doings, the more that dealers will lose trust, which in turn will impact the reputation of British car finance providers in general. Oftentimes, it only takes one particularly high-profile case, and/or sustained in-depth coverage by a newspaper or a television station, for the issue to become a full-blown scandal.
The concern, though, is that the problem shows no signs of ceasing, even in the face of a clear investigation by the FCA, and we hear more and more horror stories from victims. So, perhaps the question is not whether a scandal is coming, but the question may be when a scandal is coming? Therefore, dealers should be working harder than ever to ensure that anything they offer to their consumers stands up to analysis and is clear, concise and fair, with consumers not being taken advantage of. If they ensure that their behaviour is suitably professional now, then they will not be caught in the potential wildfire that could come sometime over the next few years. If they don’t, though, then bad times may lay ahead for them.
Read more about the mis-selling of PCP on our News page.