General Discussion around PCH vs PCP

[MtillingVolvo]

Hi All,

Just ran some figures for a customer on an XC90 D5 with Xenium, BLIS and Metallic on both PCP and PCH.

Same discount, same term/mileage and same deposit.

The PCP came out £114 more expensive per month than the PCH.

With the below taken into account, what are peoples thoughts on the 2 options:

PCP - 3 Services Free of Charge, Able to change the car early if required, potential of equity at the end of the term, option to buy at the end.

PCH - No servicing included, able to amend the mileage during the term but not cost effective to come out of the car early, no purchase option.

Just curious to see what peoples opinions on the 2 and what peoples buying habbits are/are likley to be moving forward?

This is a fairly typical example of the difference in payment with some being even larger.

Thanks for everyones input in advance - I have put a Poll as well now

[tt82]

Can we get more info? Amount of deposit needed, how many months, final payment, total amount payable?

[MtillingVolvo]

Of course. Below are the full details of the PCP quote with the pch being the same term/deposit/mileage but 114 less per month....

Vehicle Cost £ 50,260.00*
Less deposit* £ 5,000.00*
Payable by
36 monthly payments of £ 673.60*
1 Final Payment of £ 27,487.35*
Annual Percentage Rate 5.9%*
Guaranteed Future Value * £ 27,487.35*
Total Amount Payable £ 56,736.95*
* Based on an estimated annual mileage of 12000 miles per annum

[e123]

Personal loan. These PCH and PCPs are designed to tie you in to changing the car regularly and preferrably through the same dealer/marque.

[Considered1]

I never go for anything more than 3 months rental up front on Contract Hire and always annoys me to sift through the other deals that make it look cheaper. Money you will never get back and uneccessary imho..

[NigelDay]

Originally Posted by e123

Personal loan. These PCH and PCPs are designed to tie you in to changing the car regularly and preferrably through the same dealer/marque.

Agree. My son is almost 'locked' into a VW plan. He can't even change to Skoda which are sold on the same site in Durham.

[MtillingVolvo]

Some interesting comments...

In what way do people feel that a PCP (or PCH) lock you in to a certain manufacturer?

Also, on the 3 month rental up front comment. The way that Volvo Car Leasing work is that you pay exactly the same amount over the term and the payment profile (3, 6, 9 or 12 up front) just means that the amount is spread differently i.e. the higher the up front rental the less you pay monthly, but the overall amount is is the same....

[NigelDay]

Originally Posted by MtillingVolvo

Some interesting comments...

In what way do people feel that a PCP (or PCH) lock you in to a certain manufacturer?

Also, on the 3 month rental up front comment. The way that Volvo Car Leasing work is that you pay exactly the same amount over the term and the payment profile (3, 6, 9 or 12 up front) just means that the amount is spread differently i.e. the higher the up front rental the less you pay monthly, but the overall amount is is the same....

In the VW case, as follows. My son is now on his fifth new leased VW. He keeps them about two years. Low mileage. Shortly before the two years is up, the VW dealer contacts him with a really good deal - yes it is - and for little or no increase in the monthly payment he gets a new or increased specification car. Keeps him happy. When he enquired about jumping to Skoda (same dealer, same site) the monthly costs went up for what was effectively a similar car. There might have been some up front payment differential as well. All I know is that it was simply not worth it.

[MtillingVolvo]

I see.... from a customer retention point of view that is very good for the Brand, and if your Son is happy with the vehicles then all good for him too I guess.

If he's looking to change brand I suppose he would need to run a PCP to term or look around a bit as although VW may be offering some kind of renewal support via their finance company I'm sure you'd be able to get something else if he really wanted a change....?

Thanks for all the feedback so far, very interesting

[owyn]

From a luddite who buys my cars......

Nearly 30k for a car that's not mine, what the!

I'm not paid badly at all and find all this very distressing, I like cars and consider myself a car man but these sums are the sort thing that could buy me a nice little second house.