In research conducted by LeaseLoco, motorists choosing to use PCP as their finance model for a new vehicle can often end up paying at least double the amount when compared to the same car on a lease deal.
When assessing deals on brand-new cars, examples looked at by the firm include over £5,000 saving on a Ford Focus and more than £6,000 on a Mercedes A-Class.
Commenting on these findings, CEO of LeaseLoco, John Wilmot said, “At face value, Personal Contract Purchase (PCP) deals can seem like an attractive proposition to get a car on manageable monthly payments, but leasing is actually almost always cheaper.”
For cars that can cost up to £40,000 at list price, customers can likely find leasing deals for just £300 per month compared to PCP deals which although have greater flexibility for the consumer, have higher costs throughout the contract.
What’s the difference between leasing and PCP deals?
Leasing a car requires motorists to pay a monthly fee over a set time period, with milage guidelines to adhere to and charges to pay if these are exceeded. Drivers do not own the car, and once the contract has expired, the user returns the vehicle to the dealership, usually with the option to lease a new, upgraded model if they wish.
PCP deals are usually pricier as they offer the motorist the chance to purchase their vehicle by way of a ‘balloon payment’ at the end of the contract. If 50% of the agreement is paid, users can benefit from additional flexibility compared to leasing and walk away from the contract.
It’s important to make the best decision for you and your finances when considering vehicle finance options. Have you purchased a vehicle in the past 8 years using PCP finance? You might have a claim. Chat to our team to find out more about how we are helping customers get deserved compensation.