PCH Contract Ending Soon - Can You Buy The Car.

[E55BOF]

My son has a four-year-old (in June) A200 AMG Line Auto, which he has had from new on PCH. It was on a three-year contract initially, then last year the company asked him if he'd like to keep it for another year, so he did. It's on 26K miles now, it's not been thrashed, and it has had all four services due. It's in decent condition; the wheels need a refurb, and there are a couple of minor scuffs that should polish out, but that's all.

He's still perfectly happy with the car, and is tempted to ask if he can buy it outright if it's not too pricey; he'd be willing to pay up to £15K. The company is Nationwide Leasing Contracts. Does anyone know whether PCH terms mean it must be handed back when the contract ends, or is purchase likely to be an option?

 

[st13phil]

A phone call to the leasing company will confirm one way or the other, but many will happily dispose of the car to the current driver.

Your son may not like the price though. I was at my local main dealer’s last week and was astonished to see 3 year old used A-Class cars with sticker prices comparable to what I paid for a 1-month old example 3 years ago.

 

[Bobby Dazzler]

My son has a four-year-old (in June) A200 AMG Line Auto, which he has had from new on PCH. It was on a three-year contract initially, then last year the company asked him if he'd like to keep it for another year, so he did. It's on 26K miles now, it's not been thrashed, and it has had all four services due. It's in decent condition; the wheels need a refurb, and there are a couple of minor scuffs that should polish out, but that's all.

He's still perfectly happy with the car, and is tempted to ask if he can buy it outright if it's not too pricey; he'd be willing to pay up to £15K. The company is Nationwide Leasing Contracts. Does anyone know whether PCH terms mean it must be handed back when the contract ends, or is purchase likely to be an option?

Depends upon the finance company. I have heard that some do sell the car even if their terms & conditions suggest otherwise, so worth asking the finance company directly.

 

[Dryce]

I had a lease car a few years ago - the lease agreement said I couldn't buy the car at the end. But in the last few weeks of the lease the company did ask if I wanted a price and they sent a quote. It was high. I decided I didn't want to keep the car for anywhere near that price.

I don't know how negotiable they would have been but my estimation from the dealer selling price when it reappeared later was that there was probably at least £3K to £4K difference between the offer to me and what they really sold it for after the costs of inspection, collection, auction/selling fees and the dealer's likely gross margin.

The market is a bit odd at the moment. I've noted that the valuation on my own car has dropped quite a bit in the last three months - so I'd suggest your son get a valuation on webuyanycar to get an idea of where things are at for a rough trade-in price equivalent and compare that with any offer by the leasing company - and compare with what's on offer from the dealers.

 

[st13phil]

so I'd suggest your son get a valuation on webuyanycar to get an idea of where things are at for a rough trade-in price equivalent and compare that with any offer by the leasing company - and compare with what's on offer from the dealers

Sound advice. The market for <4 year-old cars is all over the place at the moment.

 

[chic0821]

What is personal contract hire (PCH)? Personal Contract Hire (PCH) is the long-term lease of a brand-new vehicle. PCH is different to Personal Contract Purchase (PCP) as a PCH vehicle cannot be purchased at the end of a lease, unlike PCP vehicles.

 

[st13phil]

PCH is different to Personal Contract Purchase (PCP) as a PCH vehicle cannot be purchased at the end of a lease, unlike PCP vehicles.

That's not strictly true. There's no right to purchase a PCH vehicle at the end of term, but there is a right to purchase a PCP vehicle at the end of term.

At the end of the day, it's totally down to the lease provider. Some will allow the leaseholder to purchase at the end of term, some won't. Only way to find out for sure is to ask them.

 

[Dryce]

That's not strictly true. There's no right to purchase a PCH vehicle at the end of term, but there is a right to purchase a PCP vehicle at the end of term.

Being picky. The PCH may state that you cannot buy the car at the end of the term.

I think this is a hangover from business leasing rules.

 

[chic0821]

That's not strictly true. There's no right to purchase a PCH vehicle at the end of term, but there is a right to purchase a PCP vehicle at the end of term.

PCH vehicle cannot be purchased at the end of a lease, unlike PCP vehicles.
That's what I said ????

If you sign up for PCP, at that time you are given an end of lease purchase cost should you wish to keep the vehicle

 

[chic0821]

In the past, I had a Range Rover on a PCP, which I had no intention of keeping until, by chance looking at the lease paperwork I discovered the purchase cost was less than I would get for trading in. I then paid the purchase cost then traded it in for a new one.
Conversely, I had an S Class on a PCH, which I did want to keep as I had specced it well & mileage was low. I was told no you can't keep it. From memory I think the PCH monthly was slightly less than the PCP so that was the reason for going for PCH. I was also told that the best cars, go to closed auction with only main dealers invited. My car was destined for that so I could not even find out where it was being auctioned if I wanted to buy it.

 

[st13phil]

PCH vehicle cannot be purchased at the end of a lease, unlike PCP vehicles.
That's what I said ????

I was emphasising that the difference is about a contractually enshrined right to buy vs the absence of a contractual right.

PCP includes that contractual right; PCH does not. However, some PCH lease providers will actually sell to the lessee at the end of the term, if purchase is requested. Others won’t.

 

[E55BOF]

I wouldn't have thoiught that a four-year-old bog-standard A200 on 26K miles would go to a closed auction.

 

[Dryce]

PCH vehicle cannot be purchased at the end of a lease, unlike PCP vehicles.
That's what I said ????

Well despite the Ts & Cs saying it can't be purchased - it does seem taht this can be circumvented.

My understandng is that this is really aimed at stopping businesses leasing a vehicle and claiming back the VAT and allowing the costs against the P&L - and then buying the vehicle at a very much reduced price at the end of the lease. I

 

[Dryce]

I wouldn't have thoiught that a four-year-old bog-standard A200 on 26K miles would go to a closed auction.

Things have been strange over the last year.