When contemplating the purchase of a new car, two popular financing options to consider are car leasing and Personal Contract Purchase (PCP). These methods offer distinct features and considerations tailored to various budgets and lifestyles. To help you make an informed decision, this guide outlines the differences between PCP and leasing.
Car leasing involves renting a vehicle for a fixed period, typically ranging from two to four years. Although the lease duration is flexible, it ensures regular upgrades without the burden of a substantial balloon payment.
Ownership: With car leasing, you typically won’t own the vehicle; it is returned to the finance company at the contract’s conclusion. This arrangement facilitates frequent upgrades and eliminates the need for a significant final payment. (However, in some cases you will have the option of buying the vehicle at the end of the lease, but this is not captured at the beginning of the agreement – you wait until the end of the agreement and request a price to purchase.)
PCP is a car financing method similar to a loan, where a deposit is made, and the remaining car value is divided over the agreed period. PCP includes a substantial balloon payment at the contract’s end, based on the car’s guaranteed minimum future value (GFV).
Ownership Options: PCP provides flexibility at the end of the agreement, allowing you to either pay the balloon payment and own the vehicle, return it, or trade it in for an upgrade.
To determine the better option you will need to consider factors such as the desire for ownership, how frequently you would like car upgrades, financial considerations, potential future changes in circumstances, and personal preferences.
To help you make that decision here are the key benefits of both:
Evaluate these benefits to align with your preferences and financial situation when deciding between car leasing and PCP. We offer flexible and affordable car leasing and PCP/BCP solutions for both personal and business customers. We can supply everything from eco-friendly hybrids to high-performance sports cars by any finance method, so our team of experts are sure to find your perfect vehicle at the right price.