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Auto Trader, the UK’s largest digital marketplace for buying and selling new and used vehicles, has forecast the new car market for September. Continuing on 41 months of growth, experts predict a market of 450,000 units with more than 7 in 10 new cars financed on PCP deals.
Attractive PCP deals are seen as the engine of new car market growth, complemented by buoyant consumer confidence. Figures from the Finance & Leasing Association underline just how the market has grown in recent years, with used car sales beginning to follow the new car trend with progressively higher PCP penetration.
Proportion of private car sales funded through PCPs. Source: Finance & Leasing Association
|New car sales||64%||70%||73%|
|Used car sales||26%||33%|
However, retailers are being advised to tread carefully when selling PCP products in September, following figures from the Financial Ombudsman Service which show an 18% rise in Hire Purchase complaints (including PCP deals) in 2014.
In total, 1,784 complaints were handled by the service, with the majority of these related to the purchase of a vehicle. Of these, 37% of these were found in the consumer’s favour.
“It’s worth remembering that people are often more focused on the thrill of buying a new car and can lose sight of the small print,” warned Caroline Wells, head of outreach at the ombudsman. “When making a sale we’d urge all dealers to make sure their customers know what they are signing up to and to keep records of what was discussed. That means that if problems crop up later down the line, they can be sorted out easily.”
“Retailers are looking forward to a bumper September market and it’s important that we help them make the most of the opportunities, but also to navigate a path away from potential problems,” added Paul Harrison, head of motor finance at Auto Trader. “While the increase in finance complaints is perhaps unsurprising given the overall increase in car finance sales, it is encouraging to see that the ombudsman often rules in favour of the industry. We’ve worked with the ombudsman to create a check list of new and used car finance dos and don’ts to help retailers avoid consumer complaints and manage them if they do arise.
Often issues stem from a simple lack of clarity or communication at the point of sale. Tips from Auto Trader and the ombudsman include the following.