Personal Contract Hire Fuels Growth in the UK Leasing Sector
Although the UK car market has been facing a challenging time, personal contract hire and leasing are on the rise.
BVLRA, the British Vehicle Leasing and Renting Association, has reported that the market is holding up well because of a strong demand for personal leasing in particular.
The industry’s Outlook Report suggests that BVLRA members have been successful finding new customers.
BVRLA Chief Executive Gerry Keaney says: "Personal contract hire continues to drive growth in the car leasing market and this is having a clear impact on the automotive industry’s long-term goal of reducing CO2 emissions."
Personal leasing contracts continued to represent the highest level of growth in 2019, accounting for over two million vehicles.
The number of personal contract hire taken out on both cars and LCVs grew, whilst HGVs saw a small reduction. What could be fuelling the growth of the PCH contracts in the UK leasing market?
Benefits of Personal Contract Hire
Personal contract hire (PCH) gives the driver access to a new vehicle over an defined period of time, with an agreed mileage.
While business and consumer confidence is low, this type of deal has plenty in its favour.
For a start, there are none of the big drops in value involved that come with owning a new vehicle outright.
Here, the whole thing feels different.
The driver pays a monthly fee at a fixed rate, making it easier to budget for future motoring costs.
There are also no issues around what to do when it comes to changing the car.
Providing the vehicle is in a satisfactory condition that meets BVLRA guidelines of wear and tear, the driver can then simply return it at the end of the lease agreement.
Does Hiring a Car Long Term Make Sense?
If you want a realistic, cost-effective alternative to owning a car, then PCH is an ideal solution.
In effect, it is a long-term rental of a vehicle during which you can enjoy the benefits of using it without having to feel over-committed.
It represents a nimble approach to car usage that is perfectly in keeping with changing times. This point is particularly relevant in today’s market where new full electric and hybrid technology vehicles are coming to the market all the time. Some of these vehicles in 4 to 5 years’ time will be seen as old technology, so leasing as opposed to owning a car can protect you from low future sale values.
There are other benefits to consider:
- There’s the obvious fact that it enables you to drive a brand-new car, and to keep doing so
- PCH has fixed monthly payments, so there are no nasty surprises around the corner
- There are optional maintenance packages, which cover the cost of servicing and general maintenance as part of your regular payments
- You get a full manufacturer’s warranty
- There’s no risk of you having to bear the cost of depreciation
Car leasing also gives you the opportunity to upscale your driving ambitions, putting better models and more prestigious brands of vehicle within your reach.
You could be driving a car you love.
Usage versus Ownership
Last year, the Leasing Broker Federation reported that car leasing was going from strength to strength.
Indeed, the UK is the third biggest market in the world.
Car leasing is a growing trend, fuelled by the positive experiences of people who have discovered PCH for themselves.
It is also a change that reflects other shifts in society away from ownership to usage.
Imagine the whole digital revolution, where more and more people are content to, effectively, rent their entertainment such as video games, television programmes, films and music.
PCH fits with this culture.
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