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Im interested in Personal Contract Hire..


aymski86
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From what I have read this is simply like 'renting' a car. After 'x' amount of months/years you simply hand the car back and if you want you can then take another?

this seems ideal for me as i dont actually want to buy a care or hire purchase. My main questions are how hard is it to get a car with this method? I always thought it was just for businesses?. I would imagine it is based on acceptance of a credit approval? Would it be a case of they would offer the agreement to people who can afford the car anyway?!

Anyone had any experience and can comment?

Thanks

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It's easy.. too easy some would say.

You will be subject to a credit search, and usually for private PCP's you need some form of deposit... it's probably the most expensive way of obtaining a car, but you can often get a nicer car for you money..

in some way's it's like hiring a car for three years, having all the costs involved like fuel and servicing and then handing it back after 3 years to start again. (with a new deposit)

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Just be VERY careful with what you choose!! The figures are attractive, but you are actually paying interest on the full amount of the vehicle (or something like that!!). Anyway, if you bail out early (say 12 months instead of 36 months) it gets expensive!!

I should know, i have bailed out twice!!! Now on a bog-standard HP agreement with nice clear break-out clauses, terms and pay-backs. +++

You WILL get a nicer / more modern / more expensive car for your monthyl outlay though +++

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Just be VERY careful with what you choose!! The figures are attractive, but you are actually paying interest on the full amount of the vehicle (or something like that!!). Anyway, if you bail out early (say 12 months instead of 36 months) it gets expensive!!

I should know, i have bailed out twice!!! Now on a bog-standard HP agreement with nice clear break-out clauses, terms and pay-backs. +++

You WILL get a nicer / more modern / more expensive car for your monthyl outlay though +++

Are you sure you're talking about contract hire? Contract hire is basically renting.....

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Contract Hire is Business Users (prices + VAT)

PCP is Personal Contract Purchase. Essentially, yes you are hiring the vehicle, but you are also finacing the depreciation. Hence, you can often get a £30k BMW for less per month than say a £25k Saab +++

There are alsorts of clauses tied into these deals. They do work well though if you see the full term out (or v close to the full term).

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I normally just buy my cars outright but i'm on contract hire with my 330, it's just a workhorse that does 20,000 miles a year so I don't have to worry about getting rid of it when i'm done. It's just easy and simple providing you keep it for the full term.

I've bailed out of one once before and got hammered on money, cost me around 6 grand to change the car. But i'd decided to "Have a change" from BMW's and bought a Mercedes C class, I only kept it for 5 months and wanted to die it was such a bad car. So the money to change was totally worth it in the end ;)

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Are you sure you're talking about contract hire? Contract hire is basically renting.....

You are right Nordberg.

People are getting a bit confused here.

Contract Hire is normally in the form of 3 monthly payments in advance followed by 12/24/36 monthly payments afterwards. At the end of the contract you give the car back and walk away (after paying any excess mileage charges and being stung for any scratched alloys etc). As the name suggests, it is a long term hire agreement.

These are available to businesses and individuals. The only difference between private consumers and businesses is that VAT registered businesses can reclaim 50% of the VAT costs.

PCP's are a whole different ball game and are just about the most expensive way of buying a car and are a dealer's favourite as they pay them mucho commission. Avoid!

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You are right Nordberg.

People are getting a bit confused here.

Contract Hire is normally in the form of 3 monthly payments in advance followed by 12/24/36 monthly payments afterwards. At the end of the contract you give the car back and walk away (after paying any excess mileage charges and being stung for any scratched alloys etc). As the name suggests, it is a long term hire agreement.

These are available to businesses and individuals. The only difference between private consumers and businesses is that VAT registered businesses can reclaim 50% of the VAT costs.

PCP's are a whole different ball game and are just about the most expensive way of buying a car and are a dealer's favourite as they pay them mucho commission. Avoid!

most expensive way of buying a car? your not buying a car, just renting? which is what im looking for i dont want the car at the end of it, i can see it being beneficial for me

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most expensive way of buying a car? your not buying a car, just renting? which is what im looking for i dont want the car at the end of it, i can see it being beneficial for me

Then you want Contract Hire, not PCP.

If you need to get out early eg 12 months into a 36 month agreement, you may have to pay up to 9 months payments to do so! They all have benefits and pitfalls!

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Then you want Contract Hire, not PCP.

If you need to get out early eg 12 months into a 36 month agreement, you may have to pay up to 9 months payments to do so! They all have benefits and pitfalls!

lol i know i think there has been confusion, at the title says interestested in Personal Contract Hire

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You are right Nordberg.

People are getting a bit confused here.

Contract Hire is normally in the form of 3 monthly payments in advance followed by 12/24/36 monthly payments afterwards. At the end of the contract you give the car back and walk away (after paying any excess mileage charges and being stung for any scratched alloys etc). As the name suggests, it is a long term hire agreement.

These are available to businesses and individuals. The only difference between private consumers and businesses is that VAT registered businesses can reclaim 50% of the VAT costs.

PCP's are a whole different ball game and are just about the most expensive way of buying a car and are a dealer's favourite as they pay them mucho commission. Avoid!

From recollection-and please tell me if I'm wrong here!!!-but the opportunity for a business to reclaim/offset 50% of the VAT applies to the maintenance package (if taken up) not the main rentals.....

As for PCP's they are work of the devil!!!!!!!

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In the US, car leasing is big, you can see the rates on the BMW usa website. It seems that the leasing system is much easier here - you can basically lease a car with no deposit for the term you choose then give it back - both my cars are on lease and the interest rates are competitive too (approx 4% APR at the time).

Much easier than it was in the UK

Dunc

Edited by DuncS3
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But then you have to pay company car tax anyway, which is a fortune. So you don't really save 50% VAT on the rental you pay, because you're paying more to begin with. Otherwise everybody would buy their car like that.

The company saves on the VAT Tom, the user pays the company car tax.

CC Tax isn't so bad in relation to depreciation and running costs these days. It makes a lot of sense if you get paid by dividend +++. My £44k A5 costs me £200 per month in tax. Can't complain about that!

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