PCP or PCH car leasing?

[Pubteam Lomas]

Car Sales is very simple

Purchase a car for £10800

Advertise for £12790?

Profit £1658.33

Warranty cost £100 (3 month min for a used car site) warranry cost will differ as most main dealers offer a min of 12 months, I work for a main dealer and I am paying upto £1000 on a 12 month warranty on some of our more expensive cars.

Prep £500 (Again differs depending if its a main delaer or used car site or supermarket) If you are at a main dealer most have to use a approved bodyshop meaning costs are a lot higher. for eg a small repair scuffed front bumper that a "chips away" business charge £70 for a minor repair, the job would be ok however you wont get a 12 month warranty on the repair and the job would be noticable to a trained eye. However main dealers would take them to an approved bodyshop where the cost are a lot higher.

With a main dealer they have to also cover cost which are called a house charges and provision cost on each sale

the house charge is around £335 which covers anything like, HPI check costs, electric for the building etc

Provision is for any issue cars that may go overage.

so the cost will differ from a main dealer to a used car plot.

So for a main dealer on the above car the following is broke down

£1658.33 profit (Metal profit)
Prep £500 (May include service and a minor repair)
Warranty £300 (12 months)
House Charge £335
Provision £200

Total Profit £323.33 (GP) (Metal Profit)

*Finance income will be separate.

however then you have to pay the sales exe so the Direct profit will be less.

thats why dealer prices are higher than an average used car pitch.

Top explanation.
Worked in Used Car Sales for 8 years and no punter understood how it worked.

They really thought that we made £1500 a car. I wish, as I was on 20% commission when I started (basic was £5 a day!!!).
We were lucky to average £700-800 per car. Still a tidy income if you sold upward of 15 a month.
But selling during November and Dec were horrible financially.
Basically we had to earn enough for 12 months in the first 9. The rest then was bonus money

 

[GoatersLeftShin]

Thought I'd bump this up as our car is on the blink as we're just starting to look at a few options.

I've always bought 3 year old cars and in the past around 10-13k has always got us a decent car (BMW etc). However, looking at the prices now we would be looking at paying nearly 20k for the same car! The prices have shot through the roof and I don't want to pay that kind of money for a 2nd hand car.

I've started to look at leasing and it seems a good deal, but where's the catch? My biggest fear is that I rent a car for 4 years then get hammered with MOT from the garage as well as getting hammered with services too. Also, when you hand it back it will need hundreds spending on it because of minor scratches etc and a long argument with the lease company. Are my fears right?

Has anyone got any recommendations on where to go?

 

[dickie davies]

Thought I'd bump this up as our car is on the blink as we're just starting to look at a few options.

I've always bought 3 year old cars and in the past around 10-13k has always got us a decent car (BMW etc). However, looking at the prices now we would be looking at paying nearly 20k for the same car! The prices have shot through the roof and I don't want to pay that kind of money for a 2nd hand car.

I've started to look at leasing and it seems a good deal, but where's the catch? My biggest fear is that I rent a car for 4 years then get hammered with MOT from the garage as well as getting hammered with services too. Also, when you hand it back it will need hundreds spending on it because of minor scratches etc and a long argument with the lease company. Are my fears right?

Has anyone got any recommendations on where to go?

Rent one for three years and then there's no MOT
Yes you will get a bill for scuffed alloys, paint chips etc, so you have to take this into account
Someone earlier in the thread recommended Lease loco as a good comparison site, so I'd start there, or, if you can manage to survive the insanity of it, use "Lings" as a comparison site

 

[kippax_blueboy]

I bought a 12 month old Audi on AudiFinance Lease with a £5k deposit last year. It was deepest lockdown my old car was 15 years old and many things were wrong with. I got a good deal but have I done the right thing? Will I end up haveing to find another deposit? Will it hold its value? How will electric cars affect its value?
I figure at some point I have to get an electric car and it might be the next one in 2 years time.

 

[Cotton Weave Blue]

I bought a 12 month old Audi on AudiFinance Lease with a £5k deposit last year. It was deepest lockdown my old car was 15 years old and many things were wrong with. I got a good deal but have I done the right thing? Will I end up haveing to find another deposit? Will it hold its value? How will electric cars affect its value?
I figure at some point I have to get an electric car and it might be the next one in 2 years time.

Depends but i wouldnt think you'd need to outlay that sort of money again. Unless you gave the car back and then had to start again in essence.

I've mainly had BMW the past 6 years, on my 3rd now and after a couple of years swapped for another approved used without forking a deposit and paying pretty much the same or a couple of quid difference a month. Currently got a n MSport Shadow 3 series and really pleased with it.I've found deals easier to come in November/December time in my experience.

Your car is probably worth more now that when you bought it so you'd be in a good position to negotiate your next deal with £5k plus your monthly payments already down on the car.

 

[ChicagoBlue]

Buy, keep for 10 years, sell.
Either save for it or get it on a 5 yr note THEN keep paying yourself the monthly note and at the end of 10 yrs you have the part-ex of the car as a deposit and the cash to buy a new motor!

I’m 58 and only had a small handful of cars:

- Wife brought old (‘78) family car to marriage in ‘86 (sold in ‘87)
- Then, used ‘86 Honda Prelude from a friend who got a car allowance with his job, but it had to be American
- New ‘90 Chevy Beretta (mistake, but bought because it had the new fangled airbags and ABS, which helped make the insurance dirt cheap, and we thought we were going to need a backseat for car seats!)
- New ‘94 Honda Accord bought cheap in ‘95 (still no kids!)
- New ‘00 Honda Odyssey Minivan (2 kids under 5). The start of being an actual 2 car family!
- New ‘08 Subaru WRX for me (current) when I sold the Accord
- New ‘13 Chevy Volt for wife (Opel Ampera to you). Odyssey kept until daughter went to college in ‘94, so she had something to drive.
- I was due in ‘18, but skipped “my car” during this last round to buy our daughter a ‘21 Toyota RAV4 XLE Hybrid for her 25th.
- WRX only has 65K on the odo and still going strong, but son will get it in the Fall when…
- New Model Y for me, with Oct ‘22 delivery date on website. Waited for an Austin 4680 build!

From there, we will see how the Volt does (~125K on odo) and then it’s looking like a Toyota RAV4 Prime (plug in hybrid) for SWMBO.

Married for 36 yrs this summer, and only SIX cars bought for the two of us, with a new one due later this year! $108,000 total purchase price so far or $18,000 per car average.

Try to keep them for 10 yrs, so that’s ~$1,800/yr or ~$150/month average!

- Average USED car price in States in 2021 was $30,000.
- Average NEW car price in States in 2021 was $41,000.

Buying and selling cars is usually a mugs game for everyone but the dealer. The pandemic and supply chain issues has turned those tables briefly IF you’ve got a car to sell but not buy, in most years I wouldn’t lease a car with your money under most circumstances!

I know it’s a dick extender and status symbol for some people, but it’s really just a safe, reliable, and comfortable way to get from A to B in reality, isn’t it?

 

[Lemon7277]

Thought I'd bump this up as our car is on the blink as we're just starting to look at a few options.

I've always bought 3 year old cars and in the past around 10-13k has always got us a decent car (BMW etc). However, looking at the prices now we would be looking at paying nearly 20k for the same car! The prices have shot through the roof and I don't want to pay that kind of money for a 2nd hand car.

I've started to look at leasing and it seems a good deal, but where's the catch? My biggest fear is that I rent a car for 4 years then get hammered with MOT from the garage as well as getting hammered with services too. Also, when you hand it back it will need hundreds spending on it because of minor scratches etc and a long argument with the lease company. Are my fears right?

Has anyone got any recommendations on where to go?

Morning pal...I started the thread on this originally and in the end decided to go down the pcp route as it suited our own personal circumstances better and was a no brainer..

Sold my old car to we buy any car as no finance was owed on it as they offered 1300 quid more than the dealer in px...i then managed to get kia Oldham to loan me a car as part of the deal to take a brand new Sportage till ours was registered and ready for collection which they did for 7 days as we were going away and the car loaned had no mileage restrictions on it....1000 deposit in and 2500 kia dealer contribution...2 years free servicing and after 3 years chip it back in against another with potentially no deposit or a grand max again.... I would advise not to put a big deposit in as all it's doing is reducing ya monthly payments and you don't see it back when you go back to chip it back in after the agreed term or earlier ..when we sat down and worked it out deposit wise it worked out about an extra 30 quid per month per grand in deposit...so if ya put 3000 in would reduce ya payment roughly about a ton a month...we were obviously comfortable putting the lower deposit in and a slightly higher monthly and banking the extra 6 grand still left out of the old car once deposit was paid...in the end it worked out we are paying 300 a month for 3 years with only a grand in...if we were to of put 3500 deposit wise worked out the monthly was about 215 to 225 ish per month hence why we decided to bank the bigger balance as it didn't make that much difference to the monthly

Obviously with pcp all you are doing is paying the depreciation of the car over the agreed term..hope this helps in someway to making a decision

 

[GoatersLeftShin]

Cheers @STOCKPORT'S INIESTA !

Did you go through the Kia dealer in Oldham? Do you have to have them service it or can you get it done at any garage?

Last one, have you handed it back? How was it?

 

[117 M34]

Cheers @STOCKPORT'S INIESTA !

Did you go through the Kia dealer in Oldham? Do you have to have them service it or can you get it done at any garage?

Last one, have you handed it back? How was it?

Like the above poster, I get my cars on pcp.
I'm on my 4th pcp car so I've taken 3 back. Nobody has even looked at the car when I've taken it back. I've just handed the key in and told them which car park space it was in and drove away in my new car.

 

[Cotton Weave Blue]

Cheers @STOCKPORT'S INIESTA !

Did you go through the Kia dealer in Oldham? Do you have to have them service it or can you get it done at any garage?

Last one, have you handed it back? How was it?

If your handing it back and walking away they get a pen and paper out and jot every scratch down and mileage against agreement etc. If your trading for something else either at that dealer or somewhere else they dont really take an interest