In December 2021, ‘Jack’ entered into a 59-month motor finance agreement for a Ford Focus Hatchback valued at £9,000.
The interest and APR rate on the PCP agreement was 35.9% for the full term, which resulted in a total payable amount of £17,271.05, almost double the vehicle’s total value.
While credit checks had taken place at the point of sale, there were no concerns raised about the fact Jack was already in arrears with credit card repayments. In fact, Jack recalled being pressured to take out the agreement, resulting in him feeling panicked to make an impulse decision, despite knowing that things did not seem quite right.
The high interest rate, combined with his existing credit card arrears, saw Jack start to struggle to pay for the vehicle within the space of just five months. This resulted in him having to borrow money from friends and family to keep up with the payments. The hardships he was suffering as a result left Jack experiencing anxiety and contributed to an overall decline in his mental health.
Barings Law submitted an affordability complaint on Jack’s behalf. His finance provider responded: “We have not been able to satisfy ourselves the lending that took place was suitable for you. We offer our sincere apologies for this.”
As a result of our legal experts negotiating with the provider, Barings Law secured a settlement of £1,075.78* for Jack.
*Amount awarded to Jack is before legal fees and disbursements.
