Anybody here do personal contract hire?

tonyyeb · 10 Dec 2006 at 13:58

Hi all

After my recent woes with second hand cars and the thought of high depreciation on a new car, i was thinking that one avenue of peace of mind motoring might be contract hire. Does anyone here do it? If so if you dont mind me asking how much do you pay? What are your limitations (i.e. milage etc..)? Is it a maintained contract and who is it with?

Are you happy with it? Would you recommend it for a better peace of mind?

drew · 10 Dec 2006 at 22:21

I do. What are you looking for.

I have a BMW X3. Suits my needs down to the ground.

tonyyeb · 11 Dec 2006 at 11:48

Im more concerned about costs rather than the car. I expect the X3 is quite a bit moe than a Ford Focus say!

How does servicing work? And things like new tyres, insurance, road tax etc...? Who is yours with (website link?).

Cheers

Adz · 11 Dec 2006 at 11:52

I can't see there are many benefits if you're doing it personally (ie. not through a business).

What's wrong with PCP? You get all of the protection from depreciation that you do with contract hire but with the option to own the car outright at the end if (and it's quite likely) the car is worth more than the GFV/balloon payment. It's also (so I'm told) a lot easier to get out of PCP and/or trade up/down than it is with a personal contract.

Edit: Road tax is often included in contract hire. Maintenance isn't unless specified. Insurance definitely isn't!

Don't forget PCP and contract hire are both based on the likely depreciation of the vehicle. A Ford Mondeo can cost as much as a 5-series, for instance.

Mr Jack · 11 Dec 2006 at 12:08

Adz said:
What's wrong with PCP?

Seconded. I looked into both, and found PCP to be cheaper for what you got.

Do look into Gap Insurance though, it doesn't cost very much.

tonyyeb · 11 Dec 2006 at 12:20

Thanks guys. What is PCP? What does it stand for?

Any links?

Thanks

Adz · 11 Dec 2006 at 12:22

tonyyeb said:
Thanks guys. What is PCP? What does it stand for?

Any links?

Thanks

Personal Contract Purchase

It's the most common way to buy a new car now. Various manufacturers call it by various names - for instance Ford, I believe, call it 'Options'.

tonyyeb · 11 Dec 2006 at 12:24

Adz said:
Personal Contract Purchase

It's the most common way to buy a new car now. Various manufacturers call it by various names - for instance Ford, I believe, call it 'Options'.

Is that where you get Minimum future guarenteed value where you either give up the car - nothing left to pay, keep paying the monthly until it is yours, or pay the MGFV and the car is yours?

Mr Jack · 11 Dec 2006 at 13:30

tonyyeb · 11 Dec 2006 at 13:39

tonyyeb said:
Is that where you get Minimum future guarenteed value where you either give up the car - nothing left to pay, keep paying the monthly until it is yours, or pay the MGFV and the car is yours?

Thats what we did with the Mrs' new car. Problem is we got a goodish price for her trade in which meant a lower monthly but next time round she has nothing to trade in and so the monthly will be going up.

Mr Jack · 11 Dec 2006 at 13:46

tonyyeb said:
Thats what we did with the Mrs' new car. Problem is we got a goodish price for her trade in which meant a lower monthly but next time round she has nothing to trade in and so the monthly will be going up.

What should happen is that when it comes to trade in time, the car is worth more than the MGFV and you can use the difference to cover part of the cost of the next car.

tonyyeb · 11 Dec 2006 at 13:59

Mr Jack said:
What should happen is that when it comes to trade in time, the car is worth more than the MGFV and you can use the difference to cover part of the cost of the next car.

I hope so! We got 3k off this one with a trade in. My mate works at the dealership - just hope he is still there in 3 years time!!

Rhyzz · 11 Dec 2006 at 18:57

It's not so much 'contract hire', that's a business term. You will be 'leasing' the car from the dealer. It tends to work out cheaper per month than PCP because you don't need a hefty deposit, you don't get maintenance costs included and you have to take a 2/4 year contract out, but it is ideal for people who like changing their cars often and like the feel of a new car!

Only problem is, you'll need good credit to get a leased car

wassap · 11 Dec 2006 at 19:57

One thing to bear in mind, well actually several things

maintenance is extra, dealer generally never give any discounts on PCP's, insurance wont be included and they are mileage limited, the higher your average mileage the more you pay per month, plus always be sure of what penalties are applicable if you do more than the allotted mileage after 3 years.

Business users love them, as you can blow your allowance on a motor if you have a crap company car list.

They generally represent poor value for money for joe public.

Guigsy · 11 Dec 2006 at 20:22

With PCP, if you pay for 3 years and then walk away, you're in roughly the same position as if you bought a car new, drove it for 3 years and then sold it. It does cost a bit more because there are some guarantees, but you're also locked in. The main advantage is you don't have to stump up a big deposit, but then why not just get a nice low interest bank loan instead?