Car buyers ‘confused over PCPs’

Many car buyers purchasing vehicles using personal contract plans (PCPs) do not understand how they work and may be at financial risk, according to a report.

PCPs involve the payment of an initial deposit, followed by a series of low monthly repayments and then a large final payment at the end.

The review, conducted by the Competition and Consumer Protection Commission (CCPC), shows that in 2016 the value of the credit extended to consumers via PCP agreements was approximately €800m — an increase of 65% from the previous year and accounting for just under 33,000 cars. The average PCP contract value in 2016 was just under €25,000.