Do you use PCH,? If not, why not?
Discussion
With, generally, sales of new cars slowing we, and many of our funders, are getting "creative" with ways to shift new cars. PCH, or personal contract hire, is proving to be making headway where direct sales are dropping off.
PCH is the domestic version of contract hire - the main difference, and only difference in many cases, is the VAT
The interesting part about "selling" PCH is getting all of the "pro's" over to people who are used to buying cars - not owning the car seems to be the "stumbling block".
If you can take the "ownership" objection out of the equation, PCH is suitable for many people and offers a lower cost of ownership over the duration of the contract.
My question is, how many of you use PCH, and if not, what would be your objections?
I'm about to travel the UK tagging on to various exhibitions across the country - taking PCH to the masses as it were, so I'd appreciate thoughts and suggestions.
Cheers
Just
PS. Look out for me at all sorts of shows across the UK - from business exhibitions to county shows. Come over, say hi, and grab a drink with us (alcohol free only if you're driving!)
PCH is the domestic version of contract hire - the main difference, and only difference in many cases, is the VAT
The interesting part about "selling" PCH is getting all of the "pro's" over to people who are used to buying cars - not owning the car seems to be the "stumbling block".
If you can take the "ownership" objection out of the equation, PCH is suitable for many people and offers a lower cost of ownership over the duration of the contract.
My question is, how many of you use PCH, and if not, what would be your objections?
I'm about to travel the UK tagging on to various exhibitions across the country - taking PCH to the masses as it were, so I'd appreciate thoughts and suggestions.
Cheers
Just
PS. Look out for me at all sorts of shows across the UK - from business exhibitions to county shows. Come over, say hi, and grab a drink with us (alcohol free only if you're driving!)
Because some people are brought up to work for what they want and then buy it.
The cynic in me says people living beyond their means and buying things they can't afford on poorly secured credit is one of the reasons we're in this recession.
If you can't afford it then wait 'til you can.
IMO
The cynic in me says people living beyond their means and buying things they can't afford on poorly secured credit is one of the reasons we're in this recession.
If you can't afford it then wait 'til you can.
IMO
Good point... most PH'ers I've been lucky enough to meet have been in to buying used M3's etc.
When you say "lease", do you mean as in a business lease, or "punter" finance? We can actually arrange leases on used vehicles (conditions apply).
I'm thinking more of the mass market - those people who would buy an "ordinary" car, a year or two old, on finance.
As an example, I just did a new Fiesta (nicer spec model) for roughly the same price as she was quoted for a loan to buy a used golf.
Interesting thoughts...
When you say "lease", do you mean as in a business lease, or "punter" finance? We can actually arrange leases on used vehicles (conditions apply).
I'm thinking more of the mass market - those people who would buy an "ordinary" car, a year or two old, on finance.
As an example, I just did a new Fiesta (nicer spec model) for roughly the same price as she was quoted for a loan to buy a used golf.
Interesting thoughts...
Justin Miles said:
As an example, I just did a new Fiesta (nicer spec model) for roughly the same price as she was quoted for a loan to buy a used golf.
Interesting thoughts...
Is that amazing? The Golf was more expensive originally anyway.Interesting thoughts...
Do you have any proper examples of cost of ownership, with realistic mileages on decent cars?
You know... you're right.. the Golf was more to start with!
The point is, rather than getting a used car she was getting into a brand new one with no problems (unless it was a Friday afternoon car!). It suited her and her usage better.
With regards to examples, yea sure. let me know the sort of thing you're interested in and I'll work something out. I have to admit that the worst ones, which very rarely go in favour of PCH are BMW... buy it!
The point is, rather than getting a used car she was getting into a brand new one with no problems (unless it was a Friday afternoon car!). It suited her and her usage better.
With regards to examples, yea sure. let me know the sort of thing you're interested in and I'll work something out. I have to admit that the worst ones, which very rarely go in favour of PCH are BMW... buy it!
You know... you're right.. the Golf was more to start with!
The point is, rather than getting a used car she was getting into a brand new one with no problems (unless it was a Friday afternoon car!). It suited her and her usage better.
With regards to examples, yea sure. let me know the sort of thing you're interested in and I'll work something out. I have to admit that the worst ones, which very rarely go in favour of PCH are BMW... buy it!
The point is, rather than getting a used car she was getting into a brand new one with no problems (unless it was a Friday afternoon car!). It suited her and her usage better.
With regards to examples, yea sure. let me know the sort of thing you're interested in and I'll work something out. I have to admit that the worst ones, which very rarely go in favour of PCH are BMW... buy it!
Have looked into it a few times, but the numbers didn't make any sense for above average miles. I also can't be certain of how much mileage I'll do over the next 3 years and being too far over or under would cost a fair bit more. Plus I'm not fussed about "brand new" and there's far better value to be had from a work hack buying at 1/2 years old, running for a couple of years and repeating.
I could almost see the attraction next to PCP-type arrangements if you'll definately want a new car every 2/3 years back when savings were getting 6%+, these days if you've got the cash in the bank you'd be bonkers to finance a car instead of using those savings.
I could almost see the attraction next to PCP-type arrangements if you'll definately want a new car every 2/3 years back when savings were getting 6%+, these days if you've got the cash in the bank you'd be bonkers to finance a car instead of using those savings.
We've had PCH for both our new and current car.
I am pretty business savvy and worked out the whole cost of ownership.
On the car I have just signed a deal for, according to the used values of a 3 year old car, what I am paying for it hardly covers what it is expected to depreciate during the contract period, let alone what I would have to pay in interest if I was loaning £20,000 plus.
I don't care though, you get the best of both worlds and get the cheap deals when the manufacturers just want certain models off their hands.
It has saved me thousands over ownership, and a hell of a lot less hassle when it comes to selling...
I am pretty business savvy and worked out the whole cost of ownership.
On the car I have just signed a deal for, according to the used values of a 3 year old car, what I am paying for it hardly covers what it is expected to depreciate during the contract period, let alone what I would have to pay in interest if I was loaning £20,000 plus.
I don't care though, you get the best of both worlds and get the cheap deals when the manufacturers just want certain models off their hands.
It has saved me thousands over ownership, and a hell of a lot less hassle when it comes to selling...
I guess for me, the biggest stumbling block is that these people who PCH the cars to you (or however you put it) are a business and I can't help feeling they are making money out of me taking one of these deals. Now I know that in life your going to buy something and someone else is going to make money out of it, but surely there are ways in which you could spend less money extra...???
The Moose said:
I guess for me, the biggest stumbling block is that these people who PCH the cars to you (or however you put it) are a business and I can't help feeling they are making money out of me taking one of these deals. Now I know that in life your going to buy something and someone else is going to make money out of it, but surely there are ways in which you could spend less money extra...???
Indeed.If you got your mortgage through a broker, they will also have got something from it, however it is often the case that you as a customer are better off through using them.
Similarly, if you buy a new car, you are still paying the manufacturer and the dealer, and unless you have a load of cash a loan company too.
If you play the contract hire game right you can get a great deal. Now and again a manufacturer will have a special offer and drop a couple of grand of a model, but that is the best you are going to get if you are buying personally.
However with PCH you can take advantage of a deal on a slow selling car. For example, a manufacturer with a facelift model out soon will probably be left with a load of cars they cannot sell. They'll sell those 50 or 100 in the UK to a finance company at a very low unit cost just to get rid. The finance company work on the basis of what the car will be worth at the end of the deal on the 2nd hand market - which may not be a huge amount different.
The deal I have just done is for a £25k car at £270 a month for 3 years. If I were to finance that myself and own the car I would be paying a hell of a lot more.
Other notable examples of playing the game this way is that about 3 years ago when they were getting rid of an engine type on the Merc SL you could have rented one of them for 2 years at £300 a month...
Interesting thread, and I am keen to know some numbers. Like many PHers, I run a business (thus could do things personally or via the company), choose to buy cars for cash but would be keen to take on a finance deal (preferably personal) whereby the amazing deals available today on new/nearly-new high-end cars can be translated into a reasonable monthly cost over 2-3 years, then hand the car back at the end with no further risk.
I got a PCH BMW 325 back in June 2007. At the time it was the best option for me. Instead of sticking 35k cash into a car i could stick the 35 into my business and still have the car paying for it monthly. The earnings to pay for the car came from the business anyway so in my eyes it was win win.
As with everything there are pro's and cons.
Pros are: New car built to your spec, pay a fairly small deposit and then your on the monthlys. Road tax is included and any problems with the car obviously you go straight back to the dealer. I havnt really had any problems with mine apaprt from the plastic arm that hands you your seat belt but BM sorted that no problem.
If you are getting a PCH i would recommend sorting one from your local dealer. I have heard a few horror stories off people that bought the cheaper option from online dealers. Trying to save yourself 20 quid a month will seem like nothing when your new motor turns up without the heated seats and upgraded sound system you paid for etc etc.
Cons: The millage is a bit of an arse although if you know what you do per year then be honest with yourself when getting a PCH. I have gone over mine but they are only charging 6p per mile which i didnt think was too bad? You are pretty much tied down to the contract. If for some reason you cant pay the monthly (loose your job or business goes tits etc) then i can imagine it being a nightmare. Also if you take the car back and it has dents, scuffed wheels etc they will charge a bit for it to be sorted.
As i say i would rather the money working for me in my business than sitting in a lump of metal with 4 wheels loosing money every month. You are effectivly paying the dealer the monthly depreciation of the car anyway. My BM goes back late June, not sure if i will PCH again or do something differant.
As with everything there are pro's and cons.
Pros are: New car built to your spec, pay a fairly small deposit and then your on the monthlys. Road tax is included and any problems with the car obviously you go straight back to the dealer. I havnt really had any problems with mine apaprt from the plastic arm that hands you your seat belt but BM sorted that no problem.
If you are getting a PCH i would recommend sorting one from your local dealer. I have heard a few horror stories off people that bought the cheaper option from online dealers. Trying to save yourself 20 quid a month will seem like nothing when your new motor turns up without the heated seats and upgraded sound system you paid for etc etc.
Cons: The millage is a bit of an arse although if you know what you do per year then be honest with yourself when getting a PCH. I have gone over mine but they are only charging 6p per mile which i didnt think was too bad? You are pretty much tied down to the contract. If for some reason you cant pay the monthly (loose your job or business goes tits etc) then i can imagine it being a nightmare. Also if you take the car back and it has dents, scuffed wheels etc they will charge a bit for it to be sorted.
As i say i would rather the money working for me in my business than sitting in a lump of metal with 4 wheels loosing money every month. You are effectivly paying the dealer the monthly depreciation of the car anyway. My BM goes back late June, not sure if i will PCH again or do something differant.
thisislife said:
I got a PCH BMW 325 back in June 2007. At the time it was the best option for me. Instead of sticking 35k cash into a car i could stick the 35 into my business and still have the car paying for it monthly. The earnings to pay for the car came from the business anyway so in my eyes it was win win.
As with everything there are pro's and cons.
Pros are: New car built to your spec, pay a fairly small deposit and then your on the monthlys. Road tax is included and any problems with the car obviously you go straight back to the dealer. I havnt really had any problems with mine apaprt from the plastic arm that hands you your seat belt but BM sorted that no problem.
If you are getting a PCH i would recommend sorting one from your local dealer. I have heard a few horror stories off people that bought the cheaper option from online dealers. Trying to save yourself 20 quid a month will seem like nothing when your new motor turns up without the heated seats and upgraded sound system you paid for etc etc.
Cons: The millage is a bit of an arse although if you know what you do per year then be honest with yourself when getting a PCH. I have gone over mine but they are only charging 6p per mile which i didnt think was too bad? You are pretty much tied down to the contract. If for some reason you cant pay the monthly (loose your job or business goes tits etc) then i can imagine it being a nightmare. Also if you take the car back and it has dents, scuffed wheels etc they will charge a bit for it to be sorted.
As i say i would rather the money working for me in my business than sitting in a lump of metal with 4 wheels loosing money every month. You are effectivly paying the dealer the monthly depreciation of the car anyway. My BM goes back late June, not sure if i will PCH again or do something differant.
Some good points. I'm not too sure on the recommendation to use a dealer only. I might be a bit biased being an "online broker" myself though!As with everything there are pro's and cons.
Pros are: New car built to your spec, pay a fairly small deposit and then your on the monthlys. Road tax is included and any problems with the car obviously you go straight back to the dealer. I havnt really had any problems with mine apaprt from the plastic arm that hands you your seat belt but BM sorted that no problem.
If you are getting a PCH i would recommend sorting one from your local dealer. I have heard a few horror stories off people that bought the cheaper option from online dealers. Trying to save yourself 20 quid a month will seem like nothing when your new motor turns up without the heated seats and upgraded sound system you paid for etc etc.
Cons: The millage is a bit of an arse although if you know what you do per year then be honest with yourself when getting a PCH. I have gone over mine but they are only charging 6p per mile which i didnt think was too bad? You are pretty much tied down to the contract. If for some reason you cant pay the monthly (loose your job or business goes tits etc) then i can imagine it being a nightmare. Also if you take the car back and it has dents, scuffed wheels etc they will charge a bit for it to be sorted.
As i say i would rather the money working for me in my business than sitting in a lump of metal with 4 wheels loosing money every month. You are effectivly paying the dealer the monthly depreciation of the car anyway. My BM goes back late June, not sure if i will PCH again or do something differant.
Generally main franchised dealers are tied into using 1 finance company - normally the manufacturers. Most decent brokers will have access to several different finance companies which will often mean they can offer a significant saving.
You will have to sign an order form and this will very clearly detail what options are going to be fitted. You will also have to sign a delivery hand over sheet when the car arrives. If the car turns up without them reject the car on delivery and refuse to sign the hand over sheet.
Fair point, i wouldnt out-rule using an online dealer i just preffered to do it at my local one. I did give the local dealer the best online price i had been given and they got it to £15 per month off which was good enough for me.
One major pro i forgot to mention....at the end of the term you just simply hand the car back and walk away! No advertising your motor hoping someone will buy it. Dealing with all the time wasters and tyre kickers. Before i got my PCH i had a 330 convertible which i owed outright. I sold it privatly and just got so wound up with all these idiots offering silly money etc. Another reason why i decided on PCH.
One major pro i forgot to mention....at the end of the term you just simply hand the car back and walk away! No advertising your motor hoping someone will buy it. Dealing with all the time wasters and tyre kickers. Before i got my PCH i had a 330 convertible which i owed outright. I sold it privatly and just got so wound up with all these idiots offering silly money etc. Another reason why i decided on PCH.
Well said Peter.
I agree - there could be a little "uncertainty" about using on line brokers. Companies like ours with nothing to hide have a real business address published, and real people to contact.
All of the cars that we supply are delivered through and supplied through a main dealer.
Often, because of the way that we work, we can genuinely supply cars much cheaper than a main dealer can anyway. Good buy prices on the cars combined with cheap money equals good end user prices.
If you want to chat anything through, feel free to pm either me, or Peter.
Have fun!
I agree - there could be a little "uncertainty" about using on line brokers. Companies like ours with nothing to hide have a real business address published, and real people to contact.
All of the cars that we supply are delivered through and supplied through a main dealer.
Often, because of the way that we work, we can genuinely supply cars much cheaper than a main dealer can anyway. Good buy prices on the cars combined with cheap money equals good end user prices.
If you want to chat anything through, feel free to pm either me, or Peter.
Have fun!
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