If you keep reading the various articles in the UK press about car leasing and PCP’s, you may be intreagued to find out if it suits you or your business.
Many customers believe that car leasing is only available to businesses, however, they are incorrect and individuals can also run a personal car lease on a wide range of makes and models.
PCP’s are also another good option to many people, allowing you to gain equity in the right vehicle and at the end of the agreement (or sometimes before) swap into another using the value built up in the deal as your deposit.
Lets just dig into a few pro’s and con’s of the 2 finance options:
Contract Hire or Leasing
A fixed contract usually 24 months or longer (although we do offer short-term car leases) and you effectively hire the car for the agreed time.
Pro’s of a Contract Hire
- Extremely competative deals sometimes allowing you to go for a better car than you thought.
- All you need to do is insure, fuel and maintain the vehicle including servicing and maintenance. Although, you can opt to add maintenance as an option.
- Longer term contract hire and leases may require you to have good or excellent credit.
Con’s of a Contract Hire
- You never own the vehicle, at the end you will have to give it back.
- Any damage outside of the fair, wear and tear guidelines is chargeable
- You get fixed mileage paramenters, should you go over this, you will be charged an excess mileage charge.
Personal Contract Purchase (PCP)
A personal contract purchase is a different way of buying a vehicle instead of using traditional Hire Purchase. You pay an initial amount and then take the vehicle over 2, 3 or 4 years. There is an optional final payment, which in an ideal situation is guaranteed (always read the small print).
At the end of the contract, its hoped that you have gained some equity in the vehicle, enabling you to put money down on the next and swap into a new car. Should you not have enough equity in the car, then you can had the car back. Or of course you can pay the final amount off and the car is yours.
Pro’s of a PCP
- Really good new car deals available with low or no interest payable.
- You have the log book of the car, although it doesn’t legally belong to you until the final payment has been made.
- You can sometimes swap earlier than the agreement length.
- You can settle at anytime.
Con’s of a PCP
- Fixed mileage paramenters, depending what you do with the car, if you go over the mileage agreed, you may get an excess mileage charge. So be truthful with your anticipated mileage.
- Not all of the PCP’s have a guanranteed future value, always read the small print. Sometimes these can be called offset Hire Purchase, which isn’t the same.
- If you return the car at the end, then you will be subject to fair, wair and tear guidelines. If yo have damage, you will be charged.
So is leasing or finance still on your radar?
If it is but you still have more questions, get in touch with the Cocoon Vehicles team in Derby on 01332 290173 or complete the online form below.
You can also request a quote via our Find a Car Lease system, where we can hunt down the best deals for you.