PCP versus PCH

[999pooch]

Is that business lease?

I want to transfer my personal lease to business lease, got a novation form or something to complete.

You can put a personal lease through a business. I still get a full VAT invoice with the 50% claim breakdown etc. You can claim 100% of the VAT for the servicing element aswell.

Quite often you can get better rates with business leases, but not always. You do lose some of the legal protection that comes with the personal leases though. Swings & roundabouts

[Chubbs]

If there was equity in the car why would you hand it back and not trade in????

 

The hand it back option on PCP is there to protect the consumer against the finance company having got the GFVs wrong or the market taking a nosedive due to an emissions scandal for example and it being in negative equity at the end of the agreement. On PCP there is no guarantee of having any equity, I don't know why people seem to think that there is, if you treat it the same as a PCH and assume zero equity at the end then the only surprise you will get is a good one!

 

PCH isn't for everyone, you can't perform some mods to the car, no option to keep it at the end of the term, restrictions on servicing etc, you may get a bill for cosmetic repairs at the end of the lease.

 

The thing to do is compare a PCH and PCP deal on the same car with the same mileage over the same period and make your own mind up.

 

 

I'd agree with you - look at both options and see which works best for you, which is what the OP was trying to clarify.

 

There may be several occasions when you'd walk away, all for personal reasons - change of job (company car), emigration, gifted another car after someone's demise.  I was just making the point for the OP.........

[JKW]

Many thanks for all the sensible & positive responses to my query re PCP/ PCH.

From the advice offered, I've now decided to keep my existing PCP car longer than planned ( which has been brilliant by the way) & look to exchange near the end of the term, March '17, (certainly before the new VED rates kick in !), using a broker like CarWow / Coast to Coast/ Drive the Deal to quote me on a "same car/same mileage" basis  for both PCP & PCH deals for comparison, and see which suits me best.

My only question now arising from the responses : Is GAP insurance not needed with a PCH deal ?

JKW

[aldouk]

Itv not gone for GAP cover. I believe that if the car is written off, it's their shortfall not yours?

[Defenderben]

I agree all they require is the vehicle is fully comprehensive. You do not need to insure the asset value as it is not yours, you are only the hirer.

Edited 2 January, 2016 by Defenderben

[john999boy]

I took my car on a PCP but fully intended owning it till the wheels fall off.

So paid Max 30% deposit including a dealer contribution got 3 years full servicing thrown in and paid the lot off the other week.

The big deposit meant less interest on the remaining finance (PCP).

By then paying off my remaining finance shortly after, I saved over £3.5k of interest.

Would I be correct in thinking that the interest you 'saved' (considering the time that you've had the car) would have been nowhere near that figure and only marginally different if you'd just put a minimal deposit down? Any way to save a few bob is good with me though.

[Defenderben]

As I intended paying it all off, I mean the total interest on the whole PCP had it run its course is a £3.5k saving.

[pipsyp]

I think providing you understand some of the relative risks with taking a PCH contract (in that its fixed, albeit often relatively short term with generally larger buy-out/excess mileage costs) its an excellent and generally stress free way of running a v nice car.

PCP can afford some additional protection/flexibility and also offers you the opportunity to keep the car but if you are someone who does 10ish K per year and likes to change cars every 2/3 years I think PCH is the way to go....just can prove costly if circumstances change and you need to get out of it.

For instance (and an example ive used before) you couldnt PCP a 335d XDrive M Sport tourer for just over 1k down and sub £400/month on PCP without putting in several K upfront. These deals seem to work well with popular premium cars...no doubt attributed to their relative used scarcity and OK residuals at 2/3 years.

Edited 3 January, 2016 by pipsypreturns

[999pooch]

I think providing you understand some of the relative risks with taking a PCH contract (in that its fixed, albeit often relatively short term with generally larger buy-out/excess mileage costs) its an excellent and generally stress free way of running a v nice car.

PCP can afford some additional protection/flexibility and also offers you the opportunity to keep the car but if you are someone who does 10ish K per year and likes to change cars every 2/3 years I think PCH is the way to go....just can prove costly if circumstances change and you need to get out of it.

For instance (and an example ive used before) you couldnt PCP a 335d XDrive M Sport tourer for just over 1k down and sub £400/month on PCP without putting in several K upfront. These deals seem to work well with popular premium cars...no doubt attributed to their relative used scarcity and OK residuals at 2/3 years.

Not exactly the car your quoting, but typical of the kind of offers that come up on BCH / PCH and not on PCP -

BMW 335d XDrive M sport GT, 6+23 @ 8k, £229+vat

http://www.contracthireandleasing.com/business/car-contract-hire-and-leasing/bmw/3-series/

Edited 3 January, 2016 by 999pooch

[aldouk]

Nice deal. Love the 335's. Miss my 6 cylinder diesel.

[cortina63]

There are no issues with insuring a pch car,i have a vrs tdi, my insurance company said as long as the lease period is greater than 12months, the total cost of ownership for me for 2years is just over £6300, i put 75 quid away in an isa every month, incase I smash the milage allowance by 10k miles, I also put 3k in the isa which was the remainder of my deposit that I had needed to do a pcp, also the monthly rentals are lower,but as said the car is not mine, and it needs to be looked after,but on balance im paying less than 7k for 2years motoring, and not near 26k which it probably be worth 13k in 2years, its just what suits you best

[davitc]

Also gone a first for PCH, I think it was right for me as hired loads of decent cars in last 2 years (C, E & SLK Mercs and Audi's).

 

PCH is just a long term hire car, OK you have to Insure it, look after it and depending if what maintenance package you get there might be a few wear/tear parts necessary along the way.

Edited 5 January, 2016 by davitc

[Chubbs]

Also gone a first for PCH, I think it was right for me as hired loads of decent cars in last 2 years (C, E & SLK Mercs and Audi's).

 

PCH is just a long term hire car, OK you have to Insure it, look after it and depending if what maintenance package you get there might be a few wear/tear parts necessary along the way.

 

My thoughts exactly - overall a cheaper package and you have to insure a car anyway and there are always running costs, albeit with a 24 or 36 months contract you'd be unlucky to rack up bills given warranty and maintenance deals.  I think this is the way forward for me as I know exactly where I stand financially.