Car finance confusion leaving thousands of drivers unable to make repayments

Car finance deals and finance offers are becoming more popular in the UK as the cost of owning a car increases.

They offer drivers a brand new car for sometimes as little as a few hundred pounds a month.

Security of mind knowing that these cars are less likely to go wrong and breakdown and the status symbol of owning a new motor are a number of the attractive prospects of these deals.

Finance contracts such as Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) are expected to account for almost 90 per cent of new car sales in the UK.

One problem with these plans is that they are confusing drivers, with some saying they are “not in complete control” of repayments.

According to RAC Flexion research, 72 per cent of drivers opt for the first policy they are offered and 10 per cent believe that they are not in complete control of the repayments.

A third admitted that they felt they have little control over how much deposit they paid, the scale of their optional final payment or  size of their monthly payments.

In a bid to afford these deals almost half (45 per cent) ion drivers have admitted to having to cut back on other bills to afford the repayments.

A further 12 per cent of drivers said they were forced to hand back their car because they could not afford the payments which result in them paying a penalty charge.

RAC Flexiloan spokesman Alastair Crossley said: “We saw an opportunity to provide those looking for their next car with a radically different offering and one that puts them in complete control from beginning to end.

“Flexiloan gives buyers the flexibility which schemes like PCP offer, but then offers so much more: buyers can choose to buy any car that is at least two years old and can arrange their finance securely online, meaning there is no need for awkward conversations with pushy sales agents.

“Just as the RAC has innovated to help its members at the roadside – such as being the first breakdown company to provide drivers with a universal spare wheel if their car doesn’t have one in the boot – we are now determined to do the same when it comes to finance.”

In a response to the growing number of drivers struggling to make car finance payments, RAC has launch Flexiloan which allows drivers to tailor a deal to their needs.