► Who actually buys a car outright these days?
► Here’s your guide to the top leasing deals of 2016
► From a Citroen C4 Cactus to a Porsche 911
Some 80% of the new cars sold privately in the UK last year were bought using a finance package of some kind. Why? Because it’s easy.
Everyone loves a monthly payment, and with the popular PCP finance packages you can think of the length of the contract as one mighty test drive: if you don’t grow to love the thing, hand it back; if you fall for it so badly you re-paint the garage McLaren orange and hang billboard-sized prints of it on the walls, stump up the balloon payment and keep it forever. Every manufacturer now offers these schemes, often with additional incentives like free servicing bundled in, and there are a wealth of third-party brokers to choose from too. Even premium sports car makers like McLaren and Porsche are now offering PCPs, meaning you can slip a 570S into that garage for ‘just’ £995 a month and a £39k deposit…
Another option is leasing, or Personal Contract Hire. Requiring less commitment even than a PCP, PCH is – as the name would suggest – glorified long-term hire: pay monthly for the duration of the contract, then give it back (with or without shot rubber and groaning discs) and choose something else. Being painfully fickle has never been easier.
The cars on these pages are a tight edit of what’s out there, spanning Citroëns so affordable your phone bill’s probably bigger to a brand new 911 Carrera S so capable (Giant Test, p118) any number of additional jobs to find the money – pot-washing, dog-walking, minor fraud – will be well worth the hassle.
The deals quoted here are real examples from among hundreds of thousands available via the brand new online leasing section on our website: carmagazine.co.uk/car-leasing. There’s an advanced search function there to help you hone your choice of finance package. Now let’s hone your choice of car.
Tell your PCP from your PCH
Personal Contract Hire/lease
In a nutshell: You’re hiring the car on a contract – you never own it, so there are no worries about depreciation or big balloon payments at the end.
The gist: You pay three or four monthly instalments up front, then monthly for the term. At the end of the term of the contract the car must be in good condition and showing less than the agreed mileage, or you’ll get stung for penalty charges.
Good news: Easy as pie.
Bad news: You’ll never own it.
Personal Contract Purchase
In a nutshell: You’re buying the car in easy-to-swallow instalments.
The gist: PCP arrangements tend to feature a bigger initial payment than PCH but the monthly fee is often less. At the end either pay the balloon payment to own the car, hand it back, or use it as the deposit on the next one.
Good news: Option to buy.
Bad news: If the used market wobbles, you might end up in negative equity, or unable to use the car as a deposit for the next one.
Hire purchase
In a nutshell: How your gran bought her first fridge: a 10% deposit generally, followed by monthly payments until you’ve paid off the entirety of the car.
The gist: You don’t own the car until the final payment is made, and you’re paying for the depreciation as well.
Good news: So simple your cat understands how it works, and you own the car once the last payment is made.
Bad news: Big deposit (10% usually) and at the end there’s no option to move into a new car, unlike PCP.
Our 12 favourite pay monthly heroes of 2016:
From £423pm: Jaguar F-Pace
From £499pm: Volvo XC90
From £293pm: Mazda MX-5 1.5 Sport
From £349pm: Mercedes C250D Estate AMG Line
From £326pm: Jaguar XE 2.0D 180 R-Sport auto
From £289pm: Mini Clubman Cooper S
From £84pm: Citroen C4 Cactus
From £530pm: Porsche Cayman and Cayman S
From £299pm: Honda Civic Type R
From £179pm: Ford Fiesta ST
From £219pm: Audi TT Coupe 1.8 TFSI Sport
From £852pm: Porsche 911 Carrera S
Your appetite for leasing an epic car duly whetted, find hundreds of thousands of deals in our brand new leasing section – carmagazine.co.uk/car-leasing
Read more from the March 2016 issue of CAR magazine