Car purchase (PCP) vs lease (PCH)

12
Posted 1st Sep
Morning all I know it’s a discussion on here ,
But we are looking to get a new car due to buying cars 5 years old and having to deal with the faults etc.

So we are left with PCP or PCH,
We are leaning towards leasing (PCH) as would want to give it back after 3 years and change car,

People who currently lease / PCH please can you put any info I should be aware of in terms of Tax , insurance ,fees etc it would be much appreciated
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12 Comments
I lease and currently its only fuel, maintenance and insurance that you have to pay for
I like I’m PCH I think lol
I don't really understand the benefit of PCP unless you intend on buying the car at the end? Seems like a lease with extra steps (+ interest)


I know someone who had a Kia on PCP, now on their 3rd contract as they seem to be locked into an endless handing back of the car to gain the next pcp deal, only way to escape is to buy the car at the end.
splatsplatsplat01/09/2020 10:55

I don't really understand the benefit of PCP unless you intend on buying …I don't really understand the benefit of PCP unless you intend on buying the car at the end? Seems like a lease with extra steps (+ interest)I know someone who had a Kia on PCP, now on their 3rd contract as they seem to be locked into an endless handing back of the car to gain the next pcp deal, only way to escape is to buy the car at the end.


With PCP you always have the option off giving the car back after the term so, there is always a clean exit. However, the payments you make on PCP are higher as you're given the option of buying the vehicle outright after the term so, when compared to PCH you can think of the monthly payments like (monthly lease payment + partial payment towards full ownership of the car).

A lot of people on PCP go onto other PCP deals at the end of the term, as they sometimes can use up the "equity" they have in the car towards a deposit on the next PCP deal. As opposed to PCH, where you have to stump up the deposit everytime you want a new lease.
Can i just ask, deals that need you to pay a deposit, so say you pay 2k deposit and then monthly payments and after 3 years you decide to give the car back. Do you get back the deposit? If you get another car do you have to pay another deposit or can the old one be used or something?
Beetlejuicebj01/09/2020 11:53

Can i just ask, deals that need you to pay a deposit, so say you pay 2k …Can i just ask, deals that need you to pay a deposit, so say you pay 2k deposit and then monthly payments and after 3 years you decide to give the car back. Do you get back the deposit? If you get another car do you have to pay another deposit or can the old one be used or something?


Don't think you get the deposit back on either PCP or lease.
Beetlejuicebj01/09/2020 11:53

Can i just ask, deals that need you to pay a deposit, so say you pay 2k …Can i just ask, deals that need you to pay a deposit, so say you pay 2k deposit and then monthly payments and after 3 years you decide to give the car back. Do you get back the deposit? If you get another car do you have to pay another deposit or can the old one be used or something?


In most cases you lose the deposit, however with PCP deals a lot of dealers offer money towards the deposit. When getting a new PCP, you can use the residual car value from your old PCP to help towards the deposit of the new deal
Leasing (PCH) usually includes vehicle tax and breakdown cover for the full term. PCP you will get the first years tax only. Breakdown cover will be as per manufacturers standard terms on PCP.

With PCP you have the option to voluntarily terminate and hand the car back once you have paid over half the cost of the loan, you cannot do this on PCH.

With PCP you can 'trade-in' the vehicle mid-term for something else. Not necessarily a financially savvy thing to do, but it can be done. You cannot do this on PCH.

With PCP you may build some equity over the course of the term, which can be put towards your next deal (assuming you stick with the same brand). With PCH you will never have any equity at any point.

PCH will generally give lower monthly payments than a PCP, but as above there's much less flexibility.
Edited by: "Guzzle" 1st Sep
Guzzle01/09/2020 13:47

Leasing (PCH) usually includes vehicle tax and breakdown cover for the …Leasing (PCH) usually includes vehicle tax and breakdown cover for the full term. PCP you will get the first years tax only. Breakdown cover will be as per manufacturers standard terms on PCP. With PCP you have the option to voluntarily terminate and hand the car back once you have paid over half the cost of the loan, you cannot do this on PCH. With PCP you can 'trade-in' the vehicle mid-term for something else. Not necessarily a financially savvy thing to do, but it can be done. You cannot do this on PCH. With PCP you may build some equity over the course of the term, which can be put towards your next deal (assuming you stick with the same brand). With PCH you will never have any equity at any point.PCH will generally give lower monthly payments than a PCP, but as above there's much less flexibility.


I used to sell cars and this is the most accurate description. With a PCH you are contracted to the full term. With a PCP there is slightly more flexibility.
Thanks all appriciate the comments
john_flint01/09/2020 10:43

I lease and currently its only fuel, maintenance and insurance that you …I lease and currently its only fuel, maintenance and insurance that you have to pay for


and the lease
Make sure you choose enough miles as well otherwise you'll end up paying for the extra mileage.
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