PERSONAL Contract Hire is dominating the leasing business according to the latest figures from the British Vehicle Rental and Leasing Association (BVRLA).
These show that 64% of new leasing contracts in 2018 were for PCH, increasing year-on-year to 57% of leases compared with 53% in 2017.
Car leasing offers new car buyers the convenience of a new car with only an initial rental payment – considerably less than the traditional new car deposit required for a hire purchase (HP) car finance agreement or a Personal Contract Purchase (PCP).
Paul Bulloch, managing director of Concept Vehicle Leasing, said: “Old style large car deposits and finance repayments are beginning to look a bit like cash: fast disappearing as consumers turn to the convenience of contactless card payments.
“It’s easy to see why. Motorists can drive a new, bigger car without paying a large deposit and benefit from that new car feeling and competitive monthly rentals.”
For example, Concept Vehicle Leasing has a BMW 1 Series 118i M Sport Shadow Edition 5dr on special offer for £330.02 per month after an initial rental payment of £990.07.
BMW has a finance offer on the same model for a monthly finance payment of £435.56 following a deposit of £4,629.
Bulloch added: “While leasing never allows you to own a car, the rental agreement can be renewed every three or four years. Which means you can experience that new car feeling on a regular basis.”
The BVRLA’s latest report on future industry trends supports this view, suggesting that as much as 50% of all new business is likely to be personal leasing (BVRLA Industry Outlook 2019 Report).