The Competition and Consumer Protection Commission (CCPC) in the Republic of Ireland has launched an investigation into the use of PCP in the motor finance industry.
The Irish consumer watchdog said its study will scrutinise the information that consumers are given at the point of sale. The study will also examine customers’ understanding of PCP and the structure of the agreements, including the options at the end of the term.
Last month in the UK, the Financial Conduct Authority (FCA) revealed that it was talking to US regulators for advice regarding the motor finance industry.
The CCPC said it will use the findings to review its current consumer protection regime and inform future policy decisions, stating it was aware of PCP-related issues individuals had raised.
Isolde Goggin, chairperson of the CCPC, claimed the relative newness and complexity of PCP agreements made consumer misunderstandings likely.
She said: “From our interactions with consumers we know that PCP is an increasingly popular way for consumers to finance the purchase of a car.
“However, these products are relatively new and considering their complexity there is potential for consumer misunderstanding and detriment if they take out a product that may not be suitable for them.”
Goggin said the study would focus both on the structure of the PCP market and the consumer experience, and appealed for holders of PCP agreements to contact the CCPC.