Personal Contract Hire

[tonyyeb]

Hi all

Anyone here have a car through personal contract hire? What company do you use? Is there anything someone should know if they wanted to use such a scheme?

Cheers

 

[tonyyeb]

It almost always works out cheaper and better to finance the purchase of a 6 month old car using a bank loan than it does to hire a car using Contract Hire.

Contract Hire is only really a bargain when your company is picking up the tab and enjoying the lack of VAT.

But if you don't want to take out a loan or want a shorter term (e.g. 24 months) then it looks a better solution.

 

[tonyyeb]

EDIT!

** Just realised.... forgot the VAT! **

You are £1200 worse off with the Golf on contract hire over 3 years than a 12k loan @ 6.9% and selling the car @ %50.

 

[tonyyeb]

as much as it is nice for people to think 'he owns x car' its nicer to thing 'i own this car' ;]

TBH i don't care if people think its mine or not. Most people buy on credit anyway so unless they keep up the payments then it ain't their car either - in essence.

 

[tonyyeb]

while that is true, people buying on credit are doing that, buying it.
personal contract HIRE is just that, hiring a vehicle.

But the point is to have a decent mode of transport at your disposal with the least risk and for it to remain cost effective. If contract hire did work out cheap than buying a car I would be doing it. Owning a depreciating asset rather than renting it is more risky. What if interest rates shoot through the roof when it comes to selling it and you have to drop the price to shift it. 'Owning' it wouldn't make me smug then. But then it would make the next contract hire purchase more expensive per month.... oh the headache!!

 

[tonyyeb]

Fair enough. I guess owning the car means you can change the wheels, change the stereo etc... I'm looking at this sort of thing in addition to a 'weekend' car. If it was cheaper with little risk then it would be perfect. But it seems its more expensive and not even close!

 

[tonyyeb]

I also think you're basing too much of your decision on the one website suggested and that hasn't been updated in quite some time by the looks of the fact that none of the cars on there are newer than the '06 model year.

You might be right. I just got a quote for a VW Golf 1.4S which works out at £208inc VAT over 24 months (£4992 total cost over two years)

12k @ 6.9% over 24 months is £535pm. Sell it at 2 years old for 8.5k (looking at autotrader for rough guide) means a cost of £4670 (with two years road tax). Thats if the car sells for £8,500 in two years, plus the cost of selling and the hassel. Plus I don't have £535 a month to spend!

To get the monthlies together. 12k over 60 months is £236pm (£14160 over the term of the loan). I'm not sure what will be outstanding on the loan after 2 years but it will obviously be more expensive as more interest will be paid.

 

[tonyyeb]

no offence, but why would you want to PCH a 1.4 golf?
i can almost see the point with a worthwhile car, but what does a 1.4 golf give you that a 2nd hand car and a loan would not be a better option?

Nope not interested in 2nd hand cars. I know that most are fine etc etc etc blah blah blah but i've had one too many problems with cars and lack of warranty, hassel getting it fixed, amount time spent at the dealer etc etc... I'm just put off completly. And I know new cars can have problems too.

I was looking at an Astra Sport Hatch, Golf, Focus etc... The Golf is so far the best value out of those i've been quoted for. I only need a smallish Hatchback - not a Porsche or BMW etc.. My weekend car that I plan to get next year will be enough fun for me i hope - and it i expect will have its problems. I dont want two cars with issues!

I don't want a loan either - i'd have to get a big loan over a long period (and have the hassel of selling the car on) - just to get lower monthly payments - similar to what i would be paying for the Golf would get me the same kind of car im getting rid of - 2002 Focus Zetec 1.6.