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Kia PCP Claims

Did you have a Kia 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 Kia

The Kia Corporation was founded in May 1944 and is Korea’s oldest manufacturer of motor vehicles. Headquartered in Seoul, South Korea, Kia is owned by parent company Hyundai and has been since 1998. According to the brand’s press site, Kia has had some notable achievements, milestones, and statistics so far this year, including:

Kia EV9 voted ‘World’s Best Car for 2024’ in the WWCOTY awards after rigorous evaluations by 75 women motoring journalists from 52 countries
January 19, 2024 – Kia has won four awards at the 2024 What Car? Car of the Year awards, including major category wins for the Kia Sportage and Kia EV6.

January 8, 2024 – Kia has revealed its Platform Beyond Vehicle (PBV) future strategy at the 2024 Consumer Electronics Show (CES) in Las Vegas. Kia’s PBV business will initially be based around the introduction of an all-new, modular vehicle, previewed by the Kia Concept PV5.

What are Kia PCP claims?

The Financial Conduct Authority announced this January that they are investigating PCP and HP agreements to determine whether hidden commission payments were being made to brokers by lenders. The FCA’s investigation has the potential to allow millions of car finance customers to claim compensation from their lender/broker. According to consumer expert Martin Lewis, this form of misselling has the potential to reach a similar scale PPI misselling. The FCA will be seeking to determine whether or not discretionary commissions were made by brokers who were financially incentivised by brands to offer higher interest rates.

The regulators decision to investigate has been the result of more than 10,000 customer complaints concerning motor finance firms potentially unfairly rejecting mis-selling claims. Such complaints from customers stem from the belief that their contract was more costly due to their dealer/broker earning a significant secret commission from their policy.

Who has a Kia PCP claim?

You may currently be wondering whether you may have an upcoming claim against Kia in the not-too-distant future about your car finance deal. Firstly, it’s important to recognise that however the FCA rules on the matter, the compensation will only cover car finance sales that meet certain criteria. In keeping with the deadline that prohibited hidden commissions, complaints need to be made only for car finance agreements sold before the 28th of January 2021. In addition to needing to precede the above deadline, the car sale must have utilised a personal contract purchase or a hire purchase offering. Unlike a PCP agreement, a hire purchase agreement means the customer pays the value of the car in specific monthly installments.

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 Kia PCP compensation

For the next eight months firms have been asked to stop responding to complaints by the FCA. The exact period began after 17th November 2023 and will end on the 25th September 2024 to allow the whilst FCA to conduct their investiagtion. 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 misselliing, you are generally required to make your complaint to your provider within six 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.

Kia 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.

Kia 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.

Kia 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 Kia PCP claim worth?

Nobody knows how much a Kia PCP claim might be worth and not even the FCA has mentioned the amount of financial compensation that may be available to car finance customers in the future. In fact, The FCA 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