60% of Car Buyers Choosing PCP deals
The number of motorists funding vehicles via Personal Contract Purchase plans has risen to sixty per-cent of the new car finance market
The number of motorists funding vehicles via Personal Contract Purchase plans has risen to sixty per-cent of the new car finance market. There are some real bargains to be found, especially if you compare the cost to traditional hire purchase or a loan. The reason for this is that you are not paying for all of the car, just a portion of it. At the end of the term either pay a pre-agreed sum (the Guaranteed Future Value or GFV) to own the vehicle outright, use any equity over this GFV figure as a finance contribution towards an alternative, or return it. There should be nothing further to pay with this final scenario; subject to any mileage excess charges and the car's condition. Caveat this with the fact that you might not have any deposit left for your next car. Our advice is to put in an initial deposit amount that is comfortable, and one that you could put in again next time you buy.
Research has also revealed that over twenty per-cent of motorists would buy new cars within the next three months - if they were offered competitive finance. Key incentives include payments no higher than £200 per-month, in conjunction with list price reductions of up to thirty percent. Interestingly, the twenty percent of people who could be tempted to upgrade compares to only seven per-cent who say they are actively looking to buy within three months. Clearly the influence of competitive finance deals is considerable.
This research shows there is a huge appetite amongst motorists for new car finance deals. In fact, with the right discounts, potential demand for new cars increases by three-hundred per-cent from consumers who say they are already looking to buy a new car in the next three months. Over the last year or so, there has been a huge growth in the amount of new car finance provided to consumers. The recession has helped this growth, as car finance offers new car buyers more flexible low-cost and affordable finance options.'
More results show that the most popular monthly payment - as chosen by nearly twenty-five per-cent of personal contract purchase plan consumers - is only £99. Not surprising considering the fragile state of the economy. These motorists are also happy to pay £1,500 deposits to secure this low rate. Furthermore, twenty-five per-cent of Londoners would replace their cars if new finance deals offered the same, or lower, payments than their current contracts. That makes sense, of course. The same applies to nineteen per-cent of respondents from Eastern England - and eighteen per-cent of Scots.
Further research conducted by Redshift Research, has revealed that thirty-three per-cent of consumers would buy vehicles online. What a contrast to ten years ago, when shopping online for even small items was considered unusual and dangerous. There are conditions, though. Motorists look for 'very good discounts' and want the vehicles to be supplied and delivered by main dealers - and backed-up with full manufacturer warranties.