Solutions pcp (UK)
A 'solutions PCP' refers to a tailored Personal Contract Purchase (PCP) agreement offered by a lender to resolve arrears or financial difficulties, allowing the borrower to restructure payments or adjust terms to avoid default.
What this consumer right covers
A 'solutions PCP' is a modified Personal Contract Purchase (PCP) agreement designed to help borrowers experiencing financial hardship. Unlike a standard PCP, which follows a fixed payment schedule, a solutions PCP may include adjusted monthly payments, extended terms, or alternative repayment structures to make the agreement more affordable. Lenders may offer this as part of their arrears management process to support customers in difficulty while protecting their own interests. It is not a formal legal term but a practical approach used in consumer finance.
Key legal requirements
- Must comply with the Financial Conduct Authority (FCA) rules on treating customers fairly (TCF) and handling arrears.
- Requires clear communication with the borrower about changes to the agreement and their implications.
- Must be documented in writing, including any modifications to the original PCP terms.
- Lender must assess the borrower’s financial circumstances before proposing a solutions PCP.
- Borrower must consent to the proposed changes, which may involve signing a new or amended agreement.
Why this matters
A solutions PCP can prevent repossession and help borrowers manage debt, but if not properly managed, it may lead to further financial strain or disputes over the revised terms. Lenders must ensure they follow FCA guidelines to avoid unfair treatment claims, while borrowers should fully understand the long-term cost implications of restructuring their PCP agreement.
Next step with VetroCheck
Use the Car Finance PCP and HP agent if you want a structured review of the relevant documents and supporting record.
Related reading
Compliance note
This glossary content is provided for informational and educational purposes only. It does not constitute formal legal advice, does not create a solicitor-client relationship, and should be checked against current legislation, official guidance, and the facts of the specific case.
At a glance
- Definition
- A 'solutions PCP' refers to a tailored Personal Contract Purchase (PCP) agreement offered by a lender to resolve arrears or financial difficulties, allowing the borrower to restructure payments or adjust terms to avoid default.
- Term
- Solutions pcp (UK)
- Category
- Consumer
- Published
- Updated
- Keywords
- UK, Consumer, consumer