PCP or lease
- Thread starter MrGrumpy
- Start date
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T.M.H.N.E.T
Rainbows aren't just for world champions
- Location
- Northern Ireland
PCP - You pay a deposit and a set montly amount for a certain amount of allowable mileage - after 3 years you pay a massive balloon payment and keep it, hand it back(losing the deposit) or get a new car for another 3 years. In many cases, extra deals are available for servicing packages.
HP - You pay a deposit (probably) and own the vehicle at the end of the term.
HP - You pay a deposit (probably) and own the vehicle at the end of the term.
Slick
Guru
I looked at leasing many times even whilst running a business and could never make it work no matter how attractive others made it sound. All these ways of purchasing something are usually overly complicated ways of separating a fool from their money and I'm constantly surprised by how successful they are.
I like Skol
A Minging Manc...
- Location
- Sunny Ashton-under-Lyne
Hp was never mentioned. Only lease or PCP. Either way, you don't end up owning a car that you have been paying for.
It's a bit like renting a house from one of the many buy-to-let landlords in the marketplace in recent decades, great for the landlords because they end up owning the assett that some other Muppet has paid for.
biggs682
Touch it up and ride it
- Location
- Northamptonshire
PCP and lease can have mileage caps so worth checking as going over can be costly
mustang1
Legendary Member
- Location
- London, UK
PCP:
Suppose you can afford a £10k car but you fancy a £20k car (I have no idea of the actual numbers in any of this, this is just vague ramblings). Then PCP the dearer car for 3 years. After 3 years, you pay the per-arranged balloon payment and own the car, or hand the car back, or swap for another car (along with some more money).
If you can afford the £20k car without PCP, you may still want to PCP as you can use the money that you would use as a balloon payment for other purposes (either investment, either keeping it, whatever). After 3 years, once again you can choose what to do with the car (buy it, swap it, give it back). PCP also gives the advantage of (if you don't want to sell the car privately) just handing the car back. You won't get as much money as selling it privately but you also won't get the hassle of selling it privately (you may like/dislike selling privately).
PCP also has limited mileage contracts and it's usually, IMHO, a good idea to go for a deal where you have a higher mileage contract than you the actual miles you drive.
Maintenance: some car companies have exorbitant service prices and you are obliged to service the car during the PCP. To alleviate this high cost, the companies like to sell maintenance plans. You can also buy tyre insurance, wheel trim insurance, ding insurance, things like that.
You can usually get a better deal from a PCP finance company rather than a dealer. There are a few terms you need to be familiar with (I cant recall the names, someone might chime in). Loads of people PCP these days and it's an option to keep up with the Joneses.
Leasing:
IDK much about PCP, and know even less about leasing, except that with PCP, you have the option of owning the car at the end, but with leasing, you never own it.
Suppose you can afford a £10k car but you fancy a £20k car (I have no idea of the actual numbers in any of this, this is just vague ramblings). Then PCP the dearer car for 3 years. After 3 years, you pay the per-arranged balloon payment and own the car, or hand the car back, or swap for another car (along with some more money).
If you can afford the £20k car without PCP, you may still want to PCP as you can use the money that you would use as a balloon payment for other purposes (either investment, either keeping it, whatever). After 3 years, once again you can choose what to do with the car (buy it, swap it, give it back). PCP also gives the advantage of (if you don't want to sell the car privately) just handing the car back. You won't get as much money as selling it privately but you also won't get the hassle of selling it privately (you may like/dislike selling privately).
PCP also has limited mileage contracts and it's usually, IMHO, a good idea to go for a deal where you have a higher mileage contract than you the actual miles you drive.
Maintenance: some car companies have exorbitant service prices and you are obliged to service the car during the PCP. To alleviate this high cost, the companies like to sell maintenance plans. You can also buy tyre insurance, wheel trim insurance, ding insurance, things like that.
You can usually get a better deal from a PCP finance company rather than a dealer. There are a few terms you need to be familiar with (I cant recall the names, someone might chime in). Loads of people PCP these days and it's an option to keep up with the Joneses.
Leasing:
IDK much about PCP, and know even less about leasing, except that with PCP, you have the option of owning the car at the end, but with leasing, you never own it.
Deleted User
Guest
- Location
- Wolverhampton
I believe with leasing all running costs are covered, tax, insurance, service and tyres.
Costs more obviously and as already said no purchase option.
2 lads at work have cars on PCP schemes, one has a Big Volvo every few yrs the other a Discovery.
Costs more obviously and as already said no purchase option.
2 lads at work have cars on PCP schemes, one has a Big Volvo every few yrs the other a Discovery.
Mrs M
Guru
- Location
- Aberdeenshire
Mr M leased his last 2 cars.
Worked fine for him as doesn’t do a lot of miles annually so always below the mileage allowance.
Able to extend the lease on his last car for 6 months due to Covid and was asked if he wanted to purchase the vehicle at the end of the lease. Didn’t want to as no use for the dog.
Has bought his latest car as retired now and plans to keep it longer than 3 years.
Worked fine for him as doesn’t do a lot of miles annually so always below the mileage allowance.
Able to extend the lease on his last car for 6 months due to Covid and was asked if he wanted to purchase the vehicle at the end of the lease. Didn’t want to as no use for the dog.
Has bought his latest car as retired now and plans to keep it longer than 3 years.
figbat
Slippery scientist
- Location
- South Oxfordshire, UK
Effectively, yes, but you aren’t “losing” the deposit, the deposit is essentially just a large first payment which reduces how much you have to borrow (and therefore pay interest on).
I used to have lease cars through work - everything was covered; tax, insurance, tyres, servicing etc. At the end of the fixed time the cars went back, with a penalty to pay for over-mileage and/or damage.
I now have PCP - I have to cover costs but at the end of the deal I can buy it or hand it back. We did buy one car before, as the balloon payment was significantly lower than the value of the car at the time.
Drago
Legendary Member
- Location
- Suburban Poshshire
Lease. Usually cheaper, and mosts costs are all in.
PCP sets my teeth on edge, paying to service, maintain and repair a car that someone else owns. Screw that. If there is even the remotest prospect of you wanting to buy the car at the end on the rental period then just buy a car and save yourself a fortune.
PCP sets my teeth on edge, paying to service, maintain and repair a car that someone else owns. Screw that. If there is even the remotest prospect of you wanting to buy the car at the end on the rental period then just buy a car and save yourself a fortune.
Depends on your deal. You can get deals with maintenance contracts but they are obviously more expensive. My lease was for 3 years and I had to pay to service the car and pop new tyres on it. I went 5,000 miles over my mileage allowance but it was only 10p a mile so wasn't the end of the world (plus they took a year to take it lol). They paid the car tax but we had to insure it. I had to replace the windscreen due to a crack on the insurance - that wasn't covered by the lease or warranty.
Not sure if I would lease again. We now have a 2 year old car that we bought when it was a year old. Put a few grand down and traded in our old 2nd car as the deposit and got a 0% deal for the rest.
Never fancied PCP as all the people that I know with them are locked in an endless cycle of car finance. There is always some deal to get you to buy a new car. I'm not sure they care how many miles you do with PCP either - they seem to forget about that when they are trying to sell you a new car when it's a slow month!!
My next purchase will just be a new van and I'll use a bank loan / bank car finance for it after I have traded my old one in I think. Leasing and PCP seems to be very expensive in comparison.
Kajjal
Guru
- Location
- Wheely World
As mentioned above with higher mileage taking out finance to buy a car is often better value and if you buy a car that is a few years old it takes out a lot of the depreciation as well.
Electric_Andy
Heavy Metal Fan
- Location
- Plymouth
I had a friend who leased a car because he had only just passed his driving test, and the deal included insurance. It was good for him because he was paying around £200/month all in for a new Toyota Aygo. Privately he was getting quoted £80/month for just insurance on a fiesta or kia picanto. That was through the NHS so not sure such deals are available for non NHS people. He ended up buying the car at the end becasue he hadn't taken care of it (had a few scratched and dents) and also he doesn't care about cars so just wanted to stick with that he had.
Depending on your son's age and years license held, leasing could be a very good way of not getting fleeced for insurance.
Edit to add: If it were me though, I would get a used volvo or something with higher mileage and full service history. It could last for many years and would likely be cheaper to insure (check the comparison websites) because far fewer are crashed by under 25s. If captial is an issue, it's possible to get finance deals from a dealer; expensive way of doing it but maybe as affordable and you get to keep/sell the car once it's paid off.
Depending on your son's age and years license held, leasing could be a very good way of not getting fleeced for insurance.
Edit to add: If it were me though, I would get a used volvo or something with higher mileage and full service history. It could last for many years and would likely be cheaper to insure (check the comparison websites) because far fewer are crashed by under 25s. If captial is an issue, it's possible to get finance deals from a dealer; expensive way of doing it but maybe as affordable and you get to keep/sell the car once it's paid off.
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Mileage is not an issue as he doesn’t do big miles. Pro and cons for both. Did think about myself on a PCP but there is something about that as well that just gets me. A lease seems pretty straight forward never yours however I do wonder if there is limit to what you can do with it? Can you add a tow bar etc ?
