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'Plenty of safeguards' for car finance customers

There are plenty of safeguards in the payment protection insurance (PPI) market for those taking out car loans, according to a finance expert.

There are plenty of safeguards in the payment protection insurance (PPI) market for those taking out car loans, according to a finance expert.

Eric Leenders, executive director of retail at the British Bankers' Association, told BBC Two's Working Lunch that consumers should get pre-contractual information before signing any paperwork.

"The very purpose of that, introduced a couple of years ago, was to ensure consumers had the opportunity to shop around not just for the payment protection but also for the loan itself," he said.

If the consumer signs up for PPI on their car loan there must be two signatures on the agreement form – one for the loan and one for the insurance, he added.

Once an agreement has been signed there is a 14-day cooling-off period to ensure consumers can reflect on what they have signed up for.

This period is going to be extended to 30 days, according to Mr Leenders.

Last week the Competition Commission said that the majority of the more than 14 million PPI policies taken out in the UK each year are sold at the same time as the consumer takes out a loan or other form of credit.

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