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Hyundai PCP Claims

Did you have a Hyundai car finance agreement before January 28th 2021? If so you may be able to claim compensation in light of a new FCA announcement concerning hidden commissions.

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A background on Hyundai

Headquartered in Seoul, South Korea, the Hyundai brand has long been associated with reliability and uniqueness and has been referred to as the trailblazer of Korea’s automobile industry. According to the brand’s news site, Hyundai has had some notable achievements, milestones and statistics so far this year, including:

Read Motor Group awarded both Hyundai Retailer Group and Customer Retailer Group of the Year
With 10 TSP and six TSP+ awards, the Group, including Hyundai Motor, Kia and Genesis brands, leads the industry with the most combined TSP/TSP+ accolades

Free client upgrade from TUCSON Hybrid SE Connect to the Premium trim
2023 annual vehicle sales increased 7% to 4.22 million unit
Annual revenue was up 14.4% to KRW 162.7 trillion (2023)
Operating profit rose 54% to KRW 15.12 trillion; operating profit margin hit 9.3% (2023)
Net profit climbed 54% to KRW 12.27 trillion (2023)

What are Hyundai PCP compensations claims?

Three years ago in January 2021, the Financial Conduct Authority, more commonly referred to as the FCA, banned ‘discretionary commission arrangements’ (DCAs) within financial agreements. This guidance has since prevented lenders from continuing to incentivize brokers to sell increased client interest rates on car finance so that they’d obtain more commission. Three years later, in January 2024 the FCA began an investigation into this exact matter. The FCA has also stated that they have received more than 10,000 consumer complaints surrounding car finance misselling.

As a direct response to customer complaints concerning motor finance firms potentially unfairly rejecting mis-selling claims, the FCA Such complaints from customers are based on the client belief that their contract was more costly due to their dealer/broker earning a significant secret commission from their policy.

Who has a Hyundai compensation claim?

Since the investigation was launched, potentially millions of car finance customers have been left wondering whether their car finance was missold and if they have a subsequent misselling complaint. If proven that hidden commissions were being pocketed it is unknown whether or not the issue will be dealt with as a group or on a firm-by-firm basis. To qualify for a potential claim, the car finance must have been sold before January 28th, 2021. It is important to note that clients will still be able to claim if their car has now been paid off and the former agreement is essentially over. For customers who have already had a diesel emissions claim, there is no reason that this would subsequently exclude a further hidden commission claim.

You will not be able to make a complaint If you bought a car on finance after the deadline or without PCP or Hire Purchase agreement. If you did purchase your car with the aid of car finance but it was on or after the 28th of January 2021 deadline, you will not be eligible for compensation. Secondly, a personal contract hire agreement complaint in which the car was leased will not be included. If you do not fit the hidden commission criteria, you may still have a car finance unaffordablity claims if you can provided evidence that necessary background checks were not carried out by the lender or dealership who offered you the loan.

How to claim Hyundai PCP compensation

The FCA has advised firms to stop replying to current car finance misselling complaints whilst their investigation is underway. This interlude is set to end on the 25th of September 2024 to allow the FCA to conduct their investigation but it is worth noting that this deadline may be pushed back. Whilst the investigation is underway, it is a good idea to lodge any complaints to the firm as soon as you can as there is often a limitation period to be observed. With regards to misselling, you are generally required to make your complaint to your provider within 6 years of the issue, or within three years of you becoming aware of the problem.

We can help you get kickstart your complaint in order to see if you may be eligible for a payout, click here to get going.

Hyundai Secret Hidden Commisions

It has been unveiled that lenders tend to conceal the existence of commission offered to their brokers. A mystery shopping exercise carried out back in 2018 reviewed the processes followed by 122 retailers in their provision of Motor Finance. Of those 122 retailers, only 11 chose to disclose to the customer that commission may be received by the broker for arranging the finance. This violates CONC requirements as it creates an unfair relationship between customer and lender.

Hyundai Difference In Commisions

It has been found that lenders often incentivise a broker to charge a higher interest by compensating them with a commission proportional to the interest the sell. The estimated cost of this behaviour for the customers is £300m annually. An FCA consultation entitled : ‘Motor Finance discretionary commission models and consumer credit commission disclosure,’ found that Difference in Charge models are the most damaging to the customer which unnervingly consist of 95% of the 1000 agreements the FCA looked into.

Hyundai Inadequately Explained Contracts

The mystery shopper exercise mentioned earlier which was carried out by the FCA also wanted to investigate whether or not lenders fully disclosed all the necessary information regarding the Motor Finance agreements to be made. The shoppers found that the concept of ownership of a car under PCP was frequently brushed over or poorly explained. 69% of the mystery shoppers were not made aware by the broker that they would not fully own the vehicle until they had payed the final ‘balloon payment.’

How much is a Hyundai PCP claim worth?

The amount of compensation that could be due to millions of car finance customers is currently speculative at most. In fact, not even the FCA currently knows the amount of financial compensation that may be available to car finance customers in the future. The regulator so far has simply stated that it will “identify how best to make sure people who are owed compensation receive an appropriate settlement in an orderly, consistent and efficient way”.

Examples Of PCP Misselling

A list of real-life scenarios to demonstrate how you may have

been mis-sold a car on finance:

PCP wasn't the best option

A PCP car on a finance deal was not the best option; it would have worked out 40% cheaper if the customer had used a hire purchase agreement.
The customer felt that they were pushed into making the wrong decision without complete understanding.

Ownership was unclear

The salesperson did not make it clear who would own the vehicle, whether it be the customer, the finance company, or the car dealership.
PCP interest was overcharged.
The customer did not receive alternative options from the dealership.

Hidden Commisions

The salesperson did not fully explain they would receive a commission on the sale of the car.
The customer was mis sold their mileage estimation; the mileage was estimated at 9,000 per year when the dealer knew the customer exceeded this substantially.

Responsibility for repairs

The customer was not advised who would be responsible for repairs.
The vehicle broke down 6 months into the PCP finance agreement.
The car dealership would not pay for any repairs and left the customer with a large bill.

Insufficient background checks

PCP payments were unrealistic, no finance credit checks were carried out.
The customer was rushed into the finance agreement and assured payments would be affordable.
The salesperson skipped through the car finance agreement (t&c).

Pressure from dealership

The car dealership did not explain the interest properly to the customer.
Mileage was over charged mileage by 5,000 miles.
Customer was not provided with a range of options and felt pressured to take a PCP agreement.
PCP interest was overcharged.

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If you'd like to get your compensation claim in before the FCA investigation is concluded to have it lodged in advance you can do so now