British motorists are frequently confused by motor finance jargon and are unable to confidently explain even some of the more commonly used terms, according to BMW Group Financial Services (BMW FS).
The captive lender polled 1,000 car buyers in March 2015, and found that two thirds were not confident in explaining terms such as annual percentage rates, deposit contributions, excess mileage or unsecured loans.
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For some common terms, less than one in five could explain the meaning. Just 19% could explain personal contract purchase, gap insurance or minimum future values, while only 18% of people could explain what personal contract hire was.
Another revealing statistic from BMW FS was more women (25%) actually knew what PCP was than men did (12%).
Even though Finance & Leasing Association statistics showed that 77% of new car sales in May were bought with dealer-sourced finance, 28% of respondents were not able to explain any finance jargon.
Suzanne Gray, general manager of group customer strategy at BMW Group Financial Services, said: "It’s important for buyers to know exactly what they are committing to when they sign up to finance contracts. These results go a long way to illustrating the state of the nation’s knowledge about finance."
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By GlobalData
