PCH...... the 'new' PCP?

[Dr Zoidberg]

That does raise an interesting question about what happens if a leased car *does* get nicked.

Your insurance company will put their value on it, and so will the lease company - I assume this is where gap cover is quite a good idea to ensure you don't get screwed over.

[mickycee]

That's not bad at all - even if you do 30k miles over that's only £1080 in penalties.

With rates that low it makes sense to have a modest mileage on the contract and just put a bit extra aside each month.

Better to do that than over esitmate your mileage and pay for it whether you've driven the car or not.

It definitely does make sense to take a lower milage and put aside some cash if your planning to exceed it. Mine is 7.2p per mile Inc vat. I took a 10k a year one as the wife drives it mostly and only lives 5 miles from work I'm not gonna exceed it by much unless something drastic changes work wise for her. Even if that did £72 per 1000 miles isn't too bad

[73henny]

Heard a few stories of very high insurance premiums with PCH cars? Can only assume that as there is no ownership for the 'hirer', there must be an increased risk? 

[LeeHarrison]

TBH the 3.6ppm is probably the lowest excess charge that I have seen. The usual is around mickycee's mileage of 7.6ppm. I think excess mileage, in the grand scheme of things is 'fairly' nominal, overall condition could be the key factor..... but who knows?! :think:

[gadgetman]

Heard a few stories of very high insurance premiums with PCH cars? Can only assume that as there is no ownership for the 'hirer', there must be an increased risk?

Makes no odds to premiums. Some budget insurers won't entertain anyone being the owner except the policy holder - but typically these are the ones that'll happily screw you over in the event of a total loss anyway

[mickycee]

TBH the 3.6ppm is probably the lowest excess charge that I have seen. The usual is around mickycee's mileage of 7.6ppm. I think excess mileage, in the grand scheme of things is 'fairly' nominal, overall condition could be the key factor..... but who knows?! :think:

I may be wrong but I'd like to think a large company such as vwfs would be fairly reasonable with wear and tear within reason. On the same basis that a dealer taking a pcp car back in for trade in would be more forgiving of the odd scratch or wheel scuff I'd have though (maybe hoped lol) that vwfs would be keen to get you to sign up for a new vehicle at the end of the contract. So perhaps nailing you for every little mark would be counter productive in the long run. Time will tell I guess [emoji9]

[LeeHarrison]

I may be wrong but I'd like to think a large company such as vwfs would be fairly reasonable with wear and tear within reason. On the same basis that a dealer taking a pcp car back in for trade in would be more forgiving of the odd scratch or wheel scuff I'd have though (maybe hoped lol) that vwfs would be keen to get you to sign up for a new vehicle at the end of the contract. So perhaps nailing you for every little mark would be counter productive in the long run. Time will tell I guess [emoji9]

Yes Mick, couldn't agree more. You would think that sense would prevail when looking at a ~3 year 30k car. TBF with any 'chopper' coming in, if the bodyworks pretty decent, no obvious faults, no warning lights on the dash I'm happy and will give as decent money for it as possible. I know some garages go for a spin and try and knock every little mishap, but there you're already putting someones back up. As you said, potential repeat business, what more could you want?!

[jamiemad]

I cant help think that PCH is a more cost effective solution, especially for me who only does around 8k per year. I part exed my car into my 3 year PCP deal and I am pretty sure at the end of my PCP deal that equity will have all but gone meaning its cost me considerably more than a lease. I spotted a VRS petrol deal for less that £270 per month with 3 months advance payment (10k miles per year) which made me seriously consider moving to a PCH deal. just my 2 pence worth

Edited 10 March, 2015 by jamiemad

[jamiemad]

Spookily a skoda dealer I follow on a certain social media site are advertising £1500 down and £199per

Month for 3 years on a PCH deal on a tdi VRS which sounds tempting.

Edited 10 March, 2015 by jamiemad

[mickycee]

Spookily a skoda dealer I follow on a certain social media site are advertising £1500 down and £199per

Month for 3 years on a PCH deal on a tdi VRS which sounds tempting.

Did they state what annual milage that was. That only works out at £8465 for 3 years motoring. With deals that tempting (assuming that's for 10k per annum milage) it really does make pcp offers expensive unless you intend to want to own the car at the end of the agreement.

[jamiemad]

Just checked out the deal and its 2 years and 8k miles a year. Includes 2 years road tax and metallic paint.

[mickycee]

Just checked out the deal and its 2 years and 8k miles a year. Includes 2 years road tax and metallic paint.

So in effect that's 7.5 monthly payments for the deposit plus 23 monthly payments of £199. Which if you add the 2 and average it out over 2 years is an effective cost of £253 per month. But of course it only being a 2 year deal means your shelling out another deposit for your next car a year earlier than usual. So that raises a whole different topic if pch is cost effective and still value on less than a 3 yr deal.

[Exeterj]

Just checked out the deal and its 2 years and 8k miles a year. Includes 2 years road tax and metallic paint.

Including vat? That would seem good even with 'low' 8k

Looked at the recent oct3 scout PCH deals - basically work out as £6k for two years motoring in a new car. My step dad brought a 1 year old, 12 plate golf estate for £18k (probably over paid) to be told recently it's worth £7k after 2 years and another 30k miles. Even taking excess mile charges into account something like the scout deal beats this kind of depreciation hands down. If he keeps the car longer obviously depreciation slows but to be honest he's getting to the age where the hassle of mot's and potential larger service bills / lack of warranty means he wants a car less than 3-4 years old.

[chris1012]

Any deals like this for the 1.4 dsg elegance?

[999pooch]

I may be wrong but I'd like to think a large company such as vwfs would be fairly reasonable with wear and tear within reason. On the same basis that a dealer taking a pcp car back in for trade in would be more forgiving of the odd scratch or wheel scuff I'd have though (maybe hoped lol) that vwfs would be keen to get you to sign up for a new vehicle at the end of the contract. So perhaps nailing you for every little mark would be counter productive in the long run. Time will tell I guess [emoji9]

There's a lot of misinformation regurgitated about returning lease cars.

The charges for damage when returning a lease car are no different than those that would be applied (or deducted from your equity) on a PCP.

At the end of the day you agree to return the vehicle in an agreed condition (defects / damage are set out in 'fair wear & tear' & give specific measurements for scuffs / dints etc). The value of the car is set with it being returned within these criteria. Fall outside and the value slides & you will end up paying for the shortfall.

On the PCP scheme (or straight cash sale), when you trade a car, the value is usually determined by age / model / miles etc, the final value is then adjusted with any damage visually inspected by the sales guy. This is the basically the same as the lease charge albeit the amount is just deducted from your offer.

[simon_g]

Ex-Skoda owner here, now lease a BMW (a cheap 2 year deal tempted me), starting to think about what to get next and likely to be a Skoda again if they keep up the kinds of PCH deals they've been doing.

 

I always used to buy out of savings, get something a couple of years old, keep for 3-4 years, repeat. Then got a job with car allowance, have to stay under 4 years old (or they had a sliding scale of reductions), so started buying 6 months or so old, mostly ex-demo, keep a few years, repeat. I was just putting the car allowance straight into savings and using it as a pot for maintenance and for buying the next one. Never got into the whole PCP thing.

 

I don't get car allowance any more (or have the restrictions) but I do get mileage paid at HMRC max rates. I do like changing after a couple of years, PCH tends to be shorter term so I can change more often, the mileage doesn't worry me much (personal mileage is about 6k a year, everything beyond that is business miles so I keep some aside for excess mileage charges), I look after my cars so no worries about careless damage, wheel kerbing, etc.

 

The really important thing for me is that it bypassed the whole loathsome process of buying a car. I hate traipsing round different dealers, I hate salesmen, I hate negotiating, I hate the "I'll just go and speak to my manager and see what we can do" spiel, I hate the metaphorical kicking in the balls of assessing my p/x, I hate being offered overpriced GAP insurance and paint protection and rubbish like that. Everything about it is terrible. 

 

I arranged my lease car entirely over email, I was kept informed all the way through, the only phone call was the grey-haired chap on the morning of delivery to tell me what time he was going to deliver it. I know exactly what my ownership costs will be over the 2 years, at the end someone will come and take it away.  No surprises, no hassles.

[999pooch]

^^^^ Sums up my thoughts exactly!

[BA Baracus]

Spookily a skoda dealer I follow on a certain social media site are advertising £1500 down and £199per

Month for 3 years on a PCH deal on a tdi VRS which sounds tempting.

 

http://www.hotukdeals.com/deals/octavia-vrs-2-0cr-tdi-186bhp-pch-1500-deposit-199-a-month-for-23-months-6077-simpsonsskoda-2166032

[jamiemad]

That's the one I saw. Looks like it's casued a bit of a fracas on the website you linked.

[Tricky Red]

I'm pretty sure the wife's replacement will be on a lease basis over two years. These places have so much buying power that the savings can be passed onto consumers.

I looked at a Leon FR 2.0 150 ps diesel for 149 a month and 1500 down. The wifes car has enough equity for a deposit and all the payments. Simple.

[LeeHarrison]

http://www.hotukdeals.com/deals/octavia-vrs-2-0cr-tdi-186bhp-pch-1500-deposit-199-a-month-for-23-months-6077-simpsonsskoda-2166032

This is partly why the thread was started, in a nutshell a customer asked about it. The 1 thing I can't work out is how their payments vary to mine? Unless they are not using VWFS?! In theory ALL dealers should be able to give the same rate via the same finance company.

[mannyo]

Several issues I see with PCH are that

 

1) You are tied into the deal for its full length, if you want to get out there will be massive early redemption penalties and you lose everything including your deposit.

 

2) After 2/3 years etc. is up, you give the car back and have absolutely nothing to show for it, even the deposit is lost. So you pay your 8-9K over 3 years and your deposit, so its 10K gone and you have gained nothing.

 

At least with PCP and HP the longer you have the agreement the more equity you build up, so at the end of 2/3 years you either have some capital with the PCP or if on HP you have a 6-7K plus asset to show for your money which you can use for an even larger deposit on your next car.

['daiking']

Several issues I see with PCH are that

1) You are tied into the deal for its full length, if you want to get out there will be massive early redemption penalties and you lose everything including your deposit.

2) After 2/3 years etc. is up, you give the car back and have absolutely nothing to show for it, even the deposit is lost. So you pay your 8-9K over 3 years and your deposit, so its 10K gone and you have gained nothing.

At least with PCP and HP the longer you have the agreement the more equity you build up, so at the end of 2/3 years you either have some capital with the PCP or if on HP you have a 6-7K plus asset to show for your money which you can use for an even larger deposit on your next car.

Point 1 in bold. It seems like that leasing was not originally intended to be a consumer product. Unlike pcp or hp for instance where there are get outs for the consumer along the way. Are pch deals regulated in the same way from a financial/consumer credit point of view? Edited 18 March, 2015 by 'daiking'

[andy3270]

Just a thought if somebody chose pch then they know they will never own the car and are just renting it surely their attitude would be of a different nature to somebody who whould be possible buying it at the end of the term pcp . So is there a different polocy of inspection at the end of the term and each dink,scratch defect noted and a bill given to you at the end or is there a wear and tear allowance .

[LeeHarrison]

These are the points that need to be covered and thanks fellas for all the input. Every one of us is different, different mindsets, different financial situations and so on. It is more if a case of making people aware in the first instance what they are 'getting in to', a HP, PCP, PCH or a pull your pants down and smack your 4rse Wonga loan. All good points being mentioned from both the 'standard' finance customer and those who have a PCH.

Andy3270 - I think the handback process would be the same paperwork and stipulation. TBF you'd like to assume that someone renting a car for a long duration would look after it more than someone on a PCP as it's 'theirs' but again I suppose it is all down to mindsets.