PCP

danielm2323

I got in touch with BMW about my PCP agreement I had with my car which I have now paid off and kept the car. They emailed me with the below. 

I can confirm that the FCA announcement does not apply to this agreement as the FCA announcement relates to regulated Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements only. You took out a Personal Contract Purchase agreement.

can anyone explain what they mean, I thought it was the same thing? 

ClaraSais

I had this response which is equally confusing?

After reviewing our records, we can tell you that the APR on your agreement was 0.0%. This meant you did not pay any interest or charges to us for the amount you borrowed. 

As an FCA-regulated firm, we are bound by the consumer duty and a high level of integrity, the position as set out to you is complete and accurate.  As your account has not been impacted by a discretionary commission model, we therefore consider your enquiry and the matter closed.

dunstonh

I can confirm that the FCA announcement does not apply to this agreement as the FCA announcement relates to regulated Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements only. You took out a Personal Contract Purchase agreement.
can anyone explain what they mean, I thought it was the same thing? 

You should go back to them and ask them to clarify as they do appear to have contradicted themselves.

I had this response which is equally confusing?
After reviewing our records, we can tell you that the APR on your agreement was 0.0%. This meant you did not pay any interest or charges to us for the amount you borrowed. 

As an FCA-regulated firm, we are bound by the consumer duty and a high level of integrity, the position as set out to you is complete and accurate.  As your account has not been impacted by a discretionary commission model, we therefore consider your enquiry and the matter closed.

Yours is not confusing.  It is very clear in its response.
You didn't pay any interest.  Clearly no DCA applied.  So, accusing them of charging you more would be daft.  Hence why it was closed.

Nasqueron

ClaraSais said:

I had this response which is equally confusing?

After reviewing our records, we can tell you that the APR on your agreement was 0.0%. This meant you did not pay any interest or charges to us for the amount you borrowed. 

As an FCA-regulated firm, we are bound by the consumer duty and a high level of integrity, the position as set out to you is complete and accurate.  As your account has not been impacted by a discretionary commission model, we therefore consider your enquiry and the matter closed.

There is nothing confusing, DCA "scandal" relates to the seller charging you more interest than you qualified for to get extra commission, as it was impossible for you to qualify for negative interest, as you were given 0% logically you cannot have been affected by DCA 

[Deleted User]

OP did you get clarification? I imagine they meant to write PCH or Personal Contract Hire (some sort of lease product anyway) which would be correct for no commission.

As for the 0%, whilst I hate to contradict you both, this could be a fob off. Commission is regularly paid on 0% car finance deals, both fixed, volume and head office payments. Whilst there is no DCA, a volume or head office payment is included (with DCA) in the type of commission arrangement that CONC 4.5.2 states should only be given where a firm can justify the extra work undertaken. This is one of the points being examined in the review. The response neither confirms nor denies that commission was paid, just that no interest was paid, clever yes? Whether you paid more or not as a result doesn’t necessarily matter, if the commission arrangement was a breach of the rules then the redress can be punitive to the lender. We have seen that FOS awarded redress of the difference in interest rates on the two cases they gave outcomes for in January, but we have also seen in the courts the award of all commission paid by the lender to the dealer as redress. The reality behind 0% deals is that the commission and costs to cover it can be built in elsewhere, usually in the price of the vehicle. It’s part of the business model. I don’t work in car finance but an acquaintance has for some 20 years and 0% deals are just another string to the bow to convince consumers you’re getting a better deal, like buying a telly from Littlewoods at 0% interest for 2 years, but paying 20% more for the telly. The car loan was taken, if commission was paid and that commission arrangement was a breach, you could get the commission repaid to you as compensation. Ofc we await the outcome of the review but do not give up hope. I would reply to them to ask if any commission was paid for your loan such as volume bonus, tactical or head office payments. I have seen volume commission be larger than DCA on some loans where Santander have disclosed it (the only lender who seem to be readily doing so at first ask). Best of luck