With the car industry going through perhaps the biggest changes in history – with new technology, EVs and Hybrids – is it sensible to buy a new car or lease it?
We were minded to write this article when taking a look at Vantage Leasing’s new website – one of Cars UK’s recommended Car Finance and Lease firms – and struck by just how easy it is to organise PCP or PCH on just about anything you might fancy. But is it the sensible route to go, or should you look instead at HP or a bank loan for your new wheels?
If you’re a petrolhead you probably find the rapid change in cars fascinating, and, by now, you’re probably already thinking about living with an electric car, or hybrid, and keen to have the latest gadgets and gizmos too.
The trouble is, things are changing so rapidly at the moment with new technology being added to cars all the time that you might feel a whiff of consternation about how quickly any new car you opt for will become almost obsolete, as its technology is replaced by something better, and cheaper to produce, and the value of your newly-bought car plunges as a result.
That doesn’t just apply to stuff like cameras and LIDAR, fancy adaptive cruise and shiny infotainment systems, but to the fundamentals of a car too.
We’ve all seen what the VW Dieselgate scandal did to the appetite for diesel cars – not helped by governments advising people, wrongly, to buy diesels, and encouraging them with tax breaks – and today’s petrol engines are improving at a properly rapid rate with mild hybrid, hybrid and plug-in hybrid technology too as they become more efficient and less polluting, making second-hand models less desirable and therefore worth less.
And don’t think EVs escape the trap of potentially unforeseen depreciation either.
Just look at the advances we’ve seen so far in range and charging time for EVs, and that’s using, basically, the same battery technology – with some very clever improvements – that’s been around forever.
But lurking on the horizon is stuff like Solid State batteries, and when they arrive – which could be in two years or 10 – who will want a second hand electric car with lithium-ion batteries with half the range and twice the charging time? Well, people will buy them, but the price won’t be great.
So, unless you have very deep pockets, or are buying a ‘hobby’ car, the time has come to forget buying a car – either with cash, traditional leasing or HP – and treat your everyday transport needs as a simple fixed cost item – just like your mobile phone – and acquire it with either a PCP or PCH contract.
With both PCP and PCH you make a simple, fixed, monthly payment for your car, and with PCH you won’t need much, if any deposit. You won’t ever own the car, but you’ll know – up-front – just how much it will cost you. And when your ‘rental’ is done, you just hand the car back and start again. And the finance company is the one taking the risk on unforeseen depreciation, not you.
So stop thinking about ‘owning’ your car – or at least your daily driver – and think about how much easier, and sensible, it is to have a fixed outlay every month you know you can afford, find little upfront and not have the nightmare of deprecation creeping up and biting you.