nearly half finance customers fail to check contract penalties

Almost half (48%) of customers who bought their car on finance admitted to not knowing what penalties were present in their finance contract nearly half finance customers fail to check contract penalties

This was according to a survey by

Over a quarter didn’t know the interest rate payable, while over a fifth didn’t know the contract length, and a similar amount didn’t know the total amount payable. 6% of respondents admitted to not even knowing how much their monthly payments were.

The survey of 810 motorists found that 20% of drivers using car finance did no research into their finance options, with half simply picking a scheme on the spot at the dealership. 41% of respondents didn’t seek any car finance advice whatsoever.

Recent press reports have highlighted a potential issue of consumers not understanding some finance terms, such as PCP, and research seemed to add to these concerns. 22% of respondents who had used finance said they had little or no idea what PCP is, with 37% unsure what leasing is. finance editor, Christofer Lloyd says: ‘You wouldn’t sign up for a mortgage without comparing prices or shopping around, so why accept the first finance deal you’re offered when getting a car? There may be some unscrupulous sales people out there, but car buyers can can do much more to get themselves the best deal.’

Keith Adams, editor adds: ‘Hysterical stories around car finance, especially when people are nervous, are never a good thing. We should educate around ensuring that PCP can be a good thing, but only if you go into it with your eyes open and don’t over-extend yourself. Lenders should be responsible, but equally borrowers should be well informed.’