Originally Posted by
mini saltire
Ahh my sort of debate!!
First off, thank you to Andrew and to Craig for their kind words.
The PCP route (Hire Purchase with a Guaranteed Balloon) or Contract Hire is IMO the only way to finance a NEW CAR at the moment. Depreciation is running so high that it is pointless trying to own an asset that is in financial free-fall. With a PCP you do pay a higher APR than usual because you are asking the finance company to underwrite the risk of their product against the Future Value but you do have the safety net if the car is worth less than the Future Value. You can just hand your car back and start again. There are mileage clauses but as long as you are realistic then you should be fine. Contract Hire is the same but mainly used by businesses as they can claim back 50% of the VAT per month on the rental but they can never own the vehicle.
Put it this way, the only people changing their cars at the moment are the ones that are on PCP schemes or companies that have reached the end of their agreement or lease. Everyone else who has bought their cars can't afford to change as their asset is worth a lot less than they thought it would be. I have some very happy 4x4 customers who I persuaded to go this route and they are now protected from this ridiculous situation that the Motor trade is in at the moment.
Hope this helps.
Mark Dryden
Saltire Vehicles
01620 894040