Is it good to apply for Personal Contract Hire (PCH)?

[Deleted User]

If you REALLY want to drive a brand new car, and change every three years then PCP/lease-hire is a good way to go, it takes away a lot of the worry, you'll know exactly what you'll pay each month, and if the car turns out to be a disaster it's not your problem (despite providing a 'warranty' the car makers are very good at wriggling out of problems and blaming whatever they can think of to avoid having to fix/replace your car).

neilmcl

jimjames wrote: »

Buying a car you can't afford seems crazy to me, this scheme is just another way to convince people they can afford something that in reality they can't.

An older car may be cheap to buy and cost more to repair but I'm pretty sure it will still work out cheaper than depreciation on a new car if you find the right vehicle.

Who said anything about buying a car, the thread is about Contract Hire/leasing schemes and also who said the OP couldn't afford to buy a new car if they wanted to.

boots_babe

It does depend on the particular make and model of car we've found. Over the years we've had a couple of contract hire and also personal contract purchase cars.

But in each case we only signed up after doing lots of research - comparing total cost over the period of time, for the PCP/contract hire/buying nearly new. As long as you factor in everything - monthly depreciation, realistic purchase and sale cost, then you can work it out reasonably well.

You'll find some models are WAY cheaper on a contract hire or PCP than you could possibly get any other way. Whereas for others you're better off to just buy.

Think of the contract hire as just paying the monthly depreciation - if the monthly charge is less than the depreciation then you're probably onto a good deal!

rhysadams

Everyone is different and a lot of it depends on if you want to own the car at the end or just have use of a car. Prices differ as well, sometimes it makes sense just to stick it on a PCP itstead of a PCH. That way you can get out of it at anytime by either settling it, or selling the vehicle. I used to do all mine on PCP then trade in after 18 months.

Dadavester

boots_babe wrote: »

It does depend on the particular make and model of car we've found. Over the years we've had a couple of contract hire and also personal contract purchase cars.

But in each case we only signed up after doing lots of research - comparing total cost over the period of time, for the PCP/contract hire/buying nearly new. As long as you factor in everything - monthly depreciation, realistic purchase and sale cost, then you can work it out reasonably well.

You'll find some models are WAY cheaper on a contract hire or PCP than you could possibly get any other way. Whereas for others you're better off to just buy.

Think of the contract hire as just paying the monthly depreciation - if the monthly charge is less than the depreciation then you're probably onto a good deal!

This is an excellent way to go about Leasing. Compare the total contract cost to buying the car, not just the monthly rentals. As stated above as well, some manufacturers hold their value really well and work out much cheaper than similar models from different manufacturers

Newer cars tend to be more economical on fuel as well so that is always something to keep in mind.

As mentioned leasing isn't for everyone, depends on the Pro's and Con's for yourself, but if approached correctly you can get a good car for good money.

Herzlos

Shielder wrote: »

My choice was a 3 year old car (with approx. 30k on the clock) for ~£400pm over 3 years or a new leased car for ~£400pm over 3 years.

I chose to lease the car for £400pm with an annual limit of 30,000miles (which I may exceed at 7ppm excess mileage).

My view is that after 3 years, I would be in the same situation, so why not lease? Reliability is a big issue for me, so I went with the new car.

They aren't really the same. With the 3 year old car, after 3 years you own a 6 year old car that you can either keep running, having fully paid it off, or sell in order to buy another car. You're also talking about the 3 year old car being £15k so it's probably pretty high end and will still be worth in the region of £5k at 6 years old, which is quite a deposit on the next one.

With the lease car, after 3 years you hand it back and have nothing beyond a huge bill for the microscopic damage it's picked up after 3 years.