The Answer : A Lot! Prepare To Be Amazed!

More and more people are turning to car leasing for their own personal use. In fact, it’s the biggest growth area in acquiring a new car. Why is this though?

Well the answer is it can be a lot cheaper – and for most vehicles it should be cheaper – to get a Personal Contract Hire agreement (leasing) over a Personal Contract Purchase agreement – which is what a main dealership would normally offer.

Now of course, the thing to bear in mind here is that we are legally obliged to say that everybody’s personal circumstances are different and you should always weigh up your options based on your own needs.

But is there really that much difference?

A Comparison.

We wanted to highlight the potential savings of leasing a car over purchasing one through a Personal Contract Purchase agreement.  Here you normally pay a deposit, a fixed monthly amount and then a “balloon” payment (the GFV – Guaranteed Future Value) at the end to buy the car outright – or hand the car back.

We got 3 PCP quotes on 3 different vehicles to compare against our PCH terms.

We wanted to look at a broad cross section of cars – picking a large executive saloon, a mid-sized family car and the last one was a popular small, 1 litre eco-box.

Frankly, the results are staggering.

The Figures…

Now, the first thing we should say are that these figures are obviously dependent on personal circumstances. Credit rating and your personal circumstances can affect the amounts in both instances.

The deposits shown in these figures show the PCH deposit being matched to the deposits quoted for the PCP figures for a like-for-like comparison.

But still it certainly does start to explain the shift towards car leasing. It also seems that the more expensive the car, the bigger savings to be had – with a more than 50% saving on the BMW.

So Why The Huge Difference?

The Difference Between PCH & PCP

With a PCH you are paying for something different than a PCP. With a PCH agreement you are paying for the anticipated depreciation value of the vehicle for the term you have it for (usually 3-4 years).

With a PCP agreement you have the option to purchase. This means that after the agreement term you need to make a final payment to buy the car outright – or you hand it back.

The main reason though for the difference in cost is that with PCH agreements, the manufacturers provide extra levels of support on special offer deals.

So What’s The Catch?

As my old man always used to say – there’s no such thing as a free lunch – or in this case a cheaper lunch.

The catch with PCH is of course that you don’t actually own the vehicle as you have to return the car at the end of the agreement – there is no option to buy it outright.

There are terms of use as well. So you will have a mileage limit to adhere to – based on your needs. The car also has to be returned in a good condition – but these also apply to PCP agreements.

BUT – Here’s the good news!

• At the end of the term, you can get another new car for the same or similar fixed fee.
• You don’t have to worry about the depreciation value of the car.
• You don’t have to worry about that final payment and;
• You don’t have to worry about the rigmarole of selling the car to get a new one – or losing out heavily on trade-in value.

So if you are like the increasing number of motorists acquiring new vehicles each year – and can handle the fact that you won’t actually own the car – you can save a lot of money on your monthly motoring costs.

Choosing Cheshire Fleet Solutions.

As we have shown we can get fantastic Personal Contract Hire deals. We have access to literally thousands of cars of most makes and models. We’re not the sort of company who will spend all day uploading all the cars to our website – we like to speak to people.

If you would like to find out more about leasing your next car, pick up the phone, give us a call on  01543 229722 or email us using the form below and tell us what car you need – and we’ll find one for you.