Parkers.co.uk: 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
This was according to a survey by Parkers.co.uk.
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 Parkers.co.uk 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.
Parkers.co.uk 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, Parkers.co.uk 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.’