Anyone lease/pcp cars here?

[truman 10]

I'm going to have to look this one up. Presumably it's not as easy as you suggest, for example half way through a personal loan, you can't just terminate it (at least not without repaying the rest of the capital).

 

I think you can do it with a finance agreement but obviously you have to hand the car back and I'd be very surprised if you got any of it's value returned to you either..so I'm not sure how you can use this way to finance a new car every 2 years..

[Berberis 10]

I'm going to have to look this one up. Presumably it's not as easy as you suggest, for example half way through a personal loan, you can't just terminate it (at least not without repaying the rest of the capital).

 

Cyclone, you can. Its regulated finance up to £50,000 I think.

 

http://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

 

---------- Post added 18-04-2016 at 11:53 ----------

 

I think you can do it with a finance agreement but obviously you have to hand the car back and I'd be very surprised if you got any of it's value returned to you either..so I'm not sure how you can use this way to finance a new car every 2 years..

 

You wouldnt get any value back for the car. You hand it back, thats all.

 

You could refinance a car every 2 years like this, but you would quickly run out of finance companies that would lend you the money. Even though they can't affect your credit rating, they, the finance company, can refuse to provide you with services in the future.

[Cyclone 10]

Okay, so it's specific to leased cars, not a general finance thing.

 

Whilst the purpose of having a voluntary termination rights clause in a car finance agreement is to protect the consumer, there is also no doubt that some borrowers, and often some dealers, will exploit the clause to allow early cancellation of a PCP or HP if the numbers are favourable. Although it is a good safety net for consumers, it generally loses the finance company money (as you usually haven’t paid off enough to cover your car’s depreciation, the finance company is taking back a car which is worth less than the outstanding finance amount). Understandably, the finance companies do not like this exploitation one bit, but there is nothing they can do to stop it as termination rights are protected by statute.

 

There is a lot of confusion about voluntary termination, and that suits the finance companies just fine. The reality is that if you do it properly, they can’t stop you and it will not affect your credit score or credit rating (although some finance companies will decline any further finance applications from you).

 

If you do that it doesn't sound like they'll be keen to offer you a new contract.

[truman 10]

Okay, so it's specific to leased cars, not a general finance thing.

 

 

 

I think it applies to HP as well,not just leases..

[Dubaidani13 10]

Okay, so it's specific to leased cars, not a general finance thing.

 

 

 

If you do that it doesn't sound like they'll be keen to offer you a new contract.

 

the dealer has suggested it themselves a couple of times but i didnt take the option, which suggests they dont really care as long as they sell another car and this was BMW, s own finance co

[Cyclone 10]

I lease my car which to buy would be £24,500. To get a loan for this amount, it would cost me much more than I currently pay. I discount this fact against not owning the car in 3 years.

 

I also benefit from the 3 years warranty, and 3 years RAC cover to boot. No MOT's and all I have to do is service it each year. In fact, I probably won't even need to replace the tyres in the 3 years either (them being a premium brand).

The warranty and breakdown cover come with a new car anyway, they're not something you gain because you are leasing.

 

For the amount Im leasing for, I would need to buy a 3+ year old car. I would be left with all the costs of maintenance, MOT's and tax on top of what I pay.

 

True, these are valid costs to take into account.

It's not that difficult to actually write the numbers down and find out if you really are better off or not.

[Dubaidani13 10]

The warranty and breakdown cover come with a new car anyway, they're not something you gain because you are leasing.

 

True, these are valid costs to take into account.

It's not that difficult to actually write the numbers down and find out if you really are better off or not.

 

you can also PCP a used car up to 3-4 years old i think which makes top end cars more affordable, so warranty and breakdown cover does come into it.

[Cyclone 10]

you can also PCP a used car up to 3-4 years old i think which makes top end cars more affordable, so warranty and breakdown cover does come into it.

 

Good point, although that wasn't what Berberis described.

 

Just reading the voluntary termination thing a bit further

 

There are many types of car finance, and not all of them are equally protected. If you have a lease (such as a contract hire or operating lease), then you are more limited in your options. Getting out of a lease early is normally quite expensive and there is limited support for you to get around it. Leasing is effectively renting the vehicle, with no intention of eventually owning it, so you are not covered by VT rights like you are with a PCP or HP.

Which is interesting.

[Fudbeer 12]

In people's experience can the dealership's generally compete with the online merchants?

[Goooooogle 10]

In people's experience can the dealership's generally compete with the online merchants?

 

I would say never (but happy to be proved wrong)

 

As an e.g.

 

Golf Match 1.4 TSI.

 

PCP on the VW site - 24 months @ £ 292 + £ 2669 deposit. = £ 9667 total

 

Personal lease (via broker CLVR) - 23 months @ £ 168 + £ 1008 deposit = £ 4872 total (+ some small fees for the broker)

 

- but then when you go via a broker - after they do all the paperwork - the car will come from a main dealer...

 

I have no idea how this works. I would guess this is probably cheaper even than buying a 3 year old golf and taking 2 years further depreciation...

And you get that new car smell !

 

http://www.clvr.org.uk/personal-lease-cars/volkswagen/golf-hatchback/golf-hatchback-14-tsi-125-match-edition-5dr-74670482

[Cyclone 10]

Find me an F-type that has an overall lower cost to me for 4 years of ownership than buying a 3 year old one example (V6 S model, convertible) and I'll let you drive it for a day (insurance permitting) once I've bought it.

[martynh99 10]

I would say never (but happy to be proved wrong)

 

As an e.g.

 

Golf Match 1.4 TSI.

 

PCP on the VW site - 24 months @ £ 292 + £ 2669 deposit. = £ 9667 total

 

Personal lease (via broker CLVR) - 23 months @ £ 168 + £ 1008 deposit = £ 4872 total (+ some small fees for the broker)

 

- but then when you go via a broker - after they do all the paperwork - the car will come from a main dealer...

 

I have no idea how this works. I would guess this is probably cheaper even than buying a 3 year old golf and taking 2 years further depreciation...

And you get that new car smell !

 

http://www.clvr.org.uk/personal-lease-cars/volkswagen/golf-hatchback/golf-hatchback-14-tsi-125-match-edition-5dr-74670482

 

The broker you use doesn't actually finance the vehicle - thats how !

 

In my case I've got a Ford via a broker. The actual finance is from ALD Automotive, which if you look on Fords website is who Ford use for business leasing. http://www.ford.co.uk/BuyingandprotectingyourFord/Ford-for-Business/Ford-Lease

 

So basically they get to purchase cars at very cheap prices due to bulk buying power and you get cheap leasing which is usually much lower than you get in your local Ford dealer. I think ALD also do same for Vauxhall.

 

Alphabet (BMW Owned) are also another large finance place that a lot of the brokers put their business through for the same reasons.