lease or private hire
Discussion
Looking into a new car- you have basically three options
buy cash
lease
private hire
I get the first one
the second one is in essence a form of rent - you pay as you drive
the third one is a rent which gives you a purchase option at the end and a guaranteed value- why would somebody have option 2 instead?
Thanks- sorry I am sure this has been answered but I could not find links so if you know any please send
buy cash
lease
private hire
I get the first one
the second one is in essence a form of rent - you pay as you drive
the third one is a rent which gives you a purchase option at the end and a guaranteed value- why would somebody have option 2 instead?
Thanks- sorry I am sure this has been answered but I could not find links so if you know any please send
Price.
PCH can be thousands cheaper than PCP for the same car/duration/mileage.
Duration.
Quite difficult to get a 2 year PCP
Personal Finances
PCPs, the full value of your car is on your credit score as a liability. PCH, it is only usually the rental payments. ( Not always though)
This can be important if you are about to take out a mortgage etc.
PCH can be thousands cheaper than PCP for the same car/duration/mileage.
Duration.
Quite difficult to get a 2 year PCP
Personal Finances
PCPs, the full value of your car is on your credit score as a liability. PCH, it is only usually the rental payments. ( Not always though)
This can be important if you are about to take out a mortgage etc.
You missed out HP!
It's a bit old-fashioned now, but (at least) theoretically you can still put down a deposit on a car and pay off the balance over a period of time. Often, like leases & PCPs, it is 3 years.
During a lease or PCH, the individual pays a "rent" that is calculated to cover the depreciation over the duration of the agreement, with some profit thrown in.
PCP is a variation of HP where the monthly payments are reduced to a level that approximately cover the depreciation of the vehicle, rather than its full value, the difference being covered by the optional balloon payment at the end.
In theory, PCP and lease should be a similar monthly cost, but PCP tends to be a bit more expensive depending on how the deal is constructed but the PCP does allow a little more flexibility if you wish to terminate early. PCP can also be cheaper if the manufacturer has special offers running, although similar offers may also be available on leases too.
Of course, dealers love them because at the end of the agreement, most people take the third option to roll the equity in the car (positive or negative) into their next deal on another new car, like Mrs FTR and I just have!
It's a bit old-fashioned now, but (at least) theoretically you can still put down a deposit on a car and pay off the balance over a period of time. Often, like leases & PCPs, it is 3 years.
During a lease or PCH, the individual pays a "rent" that is calculated to cover the depreciation over the duration of the agreement, with some profit thrown in.
PCP is a variation of HP where the monthly payments are reduced to a level that approximately cover the depreciation of the vehicle, rather than its full value, the difference being covered by the optional balloon payment at the end.
In theory, PCP and lease should be a similar monthly cost, but PCP tends to be a bit more expensive depending on how the deal is constructed but the PCP does allow a little more flexibility if you wish to terminate early. PCP can also be cheaper if the manufacturer has special offers running, although similar offers may also be available on leases too.
Of course, dealers love them because at the end of the agreement, most people take the third option to roll the equity in the car (positive or negative) into their next deal on another new car, like Mrs FTR and I just have!
Gassing Station | Finance | Top of Page | What's New | My Stuff