Consumer watchdog to investigate finance plan used by car dealers
The consumer protection watchdog is to investigate finance plans used by car dealers.
A form of hire purchase known as Personal Contract Plan (PCP) is being used by many car dealers as their primary method of finance.
Many car buyers have reported a lack of awareness of a balloon payment needed at the end of the contract.
Other conditions can include not going over a certain mileage and guaranteeing the future value of the car.
The Competition and Consumer Protection Commission is also worried the cheaper price of monthly repayments on the plans may lead to a flood of second hand cars on the market.
Speaking today, Isolde Goggin, chairperson of the Commission, said: “After a mortgage, the purchase of a car is likely to be the biggest financial commitment a consumer will make. From our interactions with consumers we know that PCP is an increasingly popular way for consumers to finance the purchase of a car.
“However, these products are relatively new and considering their complexity there is potential for consumer misunderstanding and detriment if they take out a product that may not be suitable for them.
“The information gained through this study will guide our future work and form an evidence base that can be used by policy-makers to assess the suitability, or otherwise, of the current consumer protection regime.”
“In addition to an extensive analysis of the market and engagement with the industry, this study will focus heavily on the consumer experience so it is important that consumers have their say.
“We would like to hear from those who have a PCP agreement, particularly anyone who either experienced problems in understanding the product before buying or had difficulties after they signed up to the contract.
“You can contact us through our website ccpc.ie.”
