PCP car deals: hidden insurance trap revealed
http:// www.telegraph.co.uk/financial-services/motoring/pcp-car-deals-insurance-trap/
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....New cars will almost always start going down in value from the moment you buy them, so if you need to make a claim, insurers will only compensate you for the current market value, and not the value of the car when it was brand new - leaving you with a shortfall to pay.
So with PCP car deals you could be faced with unexpected bills if you have an accident, or if your car is stolen, as the ‘protection’ it offers only comes once the PCP loan term comes to an end, when most people hand the car back.
And with 450,000 vehicles written off every year in accidents, and over 76,000 stolen, the risks are high. There has been a significant rise in motorists defaulting on payments for new car loans, with the total amount of car finance debt going up 15% in the past year.
MotorEasy founder, Duncan McClure Fisher, said:
“Before that settlement figure is paid at the end of the agreement, you are just as exposed as with any other finance arrangement.”
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