PCP or HP or leasing?
- Thread starter ghostbustertab
- Start date
Faced the same dilemma when I went for my 184 FR DSG Estate.
Decided to go with a 3 year lease and added a DTUK box a couple of months later.
I'm due to hand it back June 2020. Whilst I'm going to miss it, I certainly wouldn't like to be dealing with a car out with the standard 3 year manufacturer warranty.
Obviously, not everyone is the same. Some people don't mind going for a 4 or a 5 year HP deal, and investing in more mods.
However, I don't want to have to worry about parts starting to fail, arguments with the dealer about who's responsible for what etc...
Lease for ease with the satisfaction of getting a new car every 2-3 years.
Furthermore, having jumped into a Cupra 300 for a Test Drive for a few hours, whilst I love the absolute animal the car is, I miss the 500nm of torques I have at my disposal at just 2,500 - 3,000 rpm on the 184.
Decided to go with a 3 year lease and added a DTUK box a couple of months later.
I'm due to hand it back June 2020. Whilst I'm going to miss it, I certainly wouldn't like to be dealing with a car out with the standard 3 year manufacturer warranty.
Obviously, not everyone is the same. Some people don't mind going for a 4 or a 5 year HP deal, and investing in more mods.
However, I don't want to have to worry about parts starting to fail, arguments with the dealer about who's responsible for what etc...
Lease for ease with the satisfaction of getting a new car every 2-3 years.
Furthermore, having jumped into a Cupra 300 for a Test Drive for a few hours, whilst I love the absolute animal the car is, I miss the 500nm of torques I have at my disposal at just 2,500 - 3,000 rpm on the 184.
I went for a lease with my Leon. Worked out the best in terms of price, and I didn't have any intention of keeping the car after the 3 year period anyway, I'm happy with my decision!
I was under the impression that the following was the significant difference:
PCP - You are the registered owner/keeper
PCH/Lease - Finance company are the registered owner/keeper.
Main drawback to a PCP is it's you negotiating alone with a dealer, usually paying them a healthy profit on top of the vehicle costs. A lease is a national company buying many cars at a discount and competing for your business. I find that usually the total lease cost is lower than the depreciation you would lose on buying the car outright and doesn't lock you into buying another PCP - otherwise you lose the equity above the surrender value.
Every lease I've had has always come with an offer to buy the vehicle at hand back - although you have no contractual right to this, or control over the price offered.
Every lease I've had has always come with an offer to buy the vehicle at hand back - although you have no contractual right to this, or control over the price offered.
You really need to sit down and work out the best deals you can get on all, and then compare and decide. I've done both (PCP and Personal Lease) over the last few years. The current lease deals on Seats are very good so probably cheaper than PCP at the moment overall. Things to remember / note :
1. With a lease, the finance company nearly always pay the road tax each year, so allow for that difference. Lease deals come and go through the year and can vary drastically and so there's no certainty that what deals you see today you'll ever get close to again !
2. As above, with PCP you are the named registered keeper on the V5. You can also pay off the finance early at anytime by ringing up for a settlement figure and paying it off (or getting a dealer to pay it off if part-exing on a new car). At the end of the PCP period you can pay off the final balloon payment and you then own the car OR you can get a trade-in value (hopefully higher than the settlement value) on the car and get the dealer to settle the finance (and they own the car) OR you can give the car back to the PCP finance company. Only with the latter do you need to stick to the mileage per annum allowed on your PCP agreement.
3. With a lease you are tied into a contract and have to see it through. You are not the registered keeper and don't get the V5 (usually anyway with most lease companies). At the end of the contract your car will be inspected and you will have to pay for any damage over and above fair wear and tear. You also need to have it serviced at the right times. You are also restricted to a set mileage per annum and will be charged per mile if you go over - check out the charges before leasing.
4 You can now get GAP insurance for leased vehicles ... try and get one that covers your initial first payment which is usually 3x or 6x the monthly payments. I'd recommend taking this out otherwise you could/would lose this initial payment if your car is written off / stolen in the early months.
5. With a lease it is much better value to stick to standard spec otherwise you will be charged quite a few ££'s per month more for optional extras.
6. If you like changing your car every two or three years a lease may well be the best deal for you at the current time. If you want to keep your car long term and mod it then probably best to PCP / HP it.
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You can pay 50% of thr monthly cost for how ever many months early you want to give it back with lease, so 3 months early would be 50% of 3 months payment
What I meant was on a pcp/hp you can just walk away without further costs. So if you have a pcp car that's been nothing but trouble you can give it back after you've payd half the total cost.
On a lease that's going to cost you and if you want to hand it back a year early then it can be quite expensive.
I can confirm this is correct, this is called a Voluntary Withdrawal, Section 99 of the Consumer Credit Act 1974.
Another thing to consider is the impact to credit file. The way I believe it it work is...
PCH only the value of the lease over the term shows on your credit file eg £7k.
With PCP the total value of the car plus interest shows on your credit file so for example £35k.
This would have an impact if you were going to be applying for mortgages or large loads etc anytime soon. (Happy to be corrected if I’ve made a mistake here)
PCH only the value of the lease over the term shows on your credit file eg £7k.
With PCP the total value of the car plus interest shows on your credit file so for example £35k.
This would have an impact if you were going to be applying for mortgages or large loads etc anytime soon. (Happy to be corrected if I’ve made a mistake here)
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