PCP versus Leasing

[Rayo2703]

I am about to finalise my order and had intended to lease for the tax benefits but am now wondering whether to go
down the PCP route instead as the tax benefits are similar. It also gives me the option to pay the balloon payment and keep the car if I want to. My concerns on leasing are mainly to do with the fair wear and tear policy. Is it different with PCP? Any views, either way, would be greatly appreciated.

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[Icyfraser]

I am about to finalise my order and had intended to lease for the tax benefits but am now wondering whether to go
down the PCP route instead as the tax benefits are similar. It also gives me the option to pay the balloon payment and keep the car if I want to. My concerns on leasing are mainly to do with the fair wear and tear policy. Is it different with PCP? Any views, either way, would be greatly appreciated.

I went via the PCP route and put through Ltd Co. For tax benefits. I think you have more flexibility re the issues you mention

 

[Fish Fingers]

If cost is similar, I would definitely go PCP.
Gives you more options and flexibility.

 

[NM1978]

I have a similar dilemma for 4S CT for end Oct delivery. Anyone used 3rd party pcp finance providers such as Oracle versus Porsche finance?

 

[Rayo2703]

I tried a few third party providers and Porsche was cheaper. It was also easier to deal just with them rather than with 2 different companies.

 

[Rayo2703]

If cost is similar, I would definitely go PCP.
Gives you more options and flexibility.

Are you able to be more specific as to what the additional options and flexibilities are?

 

[Fish Fingers]

Are you able to be more specific as to what the additional options and flexibilities are?

Lease is a fixed term and fixed mileage. No flexibility either way. At the end of the contract, give the car back and start again from scratch. Think of current situation where people hand it back and can't get another car.
Or have done low miles due to covid, but still paid for unused miles.

PCP gives you the option to 1. hand the car back 2. pay the balloon and buy it, or 3. p/x for another car.

If you put minimum deposit in and don't buy at the end (1) it can work out like a lease.
Most people go option 2 which the manufacturer likes as it encourages loyalty.

I personally go for option 3. Put a decent deposit in, pay a modest monthly figure. Then pay the balloon at the end and buy the car. But I don't have to! I can decide at the end of the contract depending on the cars value (what mileage I have put in etc).

 

[Rayo2703]

Lease is a fixed term and fixed mileage. No flexibility either way. At the end of the contract, give the car back and start again from scratch. Think of current situation where people hand it back and can't get another car.
Or have done low miles due to covid, but still paid for unused miles.

PCP gives you the option to 1. hand the car back 2. pay the balloon and buy it, or 3. p/x for another car.

If you put minimum deposit in and don't buy at the end (1) it can work out like a lease.
Most people go option 2 which the manufacturer likes as it encourages loyalty.

I personally go for option 3. Put a decent deposit in, pay a modest monthly figure. Then pay the balloon at the end and buy the car. But I don't have to! I can decide at the end of the contract depending on the cars value (what mileage I have put in etc).

 

[Rayo2703]

That all makes sense. Does anyone know if the fair wear and tear test at the end of a lease term is the same at the end of a PCP term or do different tests apply?

 

[neilj007]

Re a lease, BVRLA guidelines apply - so you're allowed to have small scratches, dents etc typical with fair wear and tear. However, if there's something that falls outside the guidelines, you'll be charged. Typically, vehicles at the end of a lease will go straight to auction (though I think Porsche dealers are now starting to take these vehicles back into their stock)
Re PCP, the dealer will look at the condition of the car and adjust the part-ex value based on this rather than specifically invoice you and they'll typically be taking it into their stock for re-sale

 

[Rayo2703]

Re a lease, BVRLA guidelines apply - so you're allowed to have small scratches, dents etc typical with fair wear and tear. However, if there's something that falls outside the guidelines, you'll be charged. Typically, vehicles at the end of a lease will go straight to auction (though I think Porsche dealers are now starting to take these vehicles back into their stock)
Re PCP, the dealer will look at the condition of the car and adjust the part-ex value based on this rather than specifically invoice you and they'll typically be taking it into their stock for re-sale

Thank you, that is helpful. Which do you think is more generous? I assume that the ballon payment takes into account fair wear and tear.

 

[Fish Fingers]

With PCP you will be paying to own the car if that's what you want....

Whether it's deposit, monthlies or balloon. They will all need to balance (but the bigger the deposit, the lower the interest rate - as less is being financed). If one goes up, the others go down.

Ideally if you are buying at end of term (like I do) you want to have a well cared for car in showroom condition with hardly any miles on it. The balloon (gfv) is fixed at outset, so you gain from looking after the car.

And vice versa if you don't.

 

[Boss Hogg]

I went lease, slightly better tax position and I didn't want to own the car after 3 years due to rapidly evolving tech. I found it was cheaper to go for a lower mileage deal and pay the excess rate, Porsche was surprised too so play around with mileage options. The service/maintenance/tyre package was competitive too, c. £2,700 for 3 years and 54k miles -not bad for 2x 'services', 1x brake fluid charge and guessing at 3 sets of tyres (could be more with a heavy right foot)

 

[neilj007]

I went lease, slightly better tax position and I didn't want to own the car after 3 years due to rapidly evolving tech. I found it was cheaper to go for a lower mileage deal and pay the excess rate, Porsche was surprised too so play around with mileage options. The service/maintenance/tyre package was competitive too, c. £2,700 for 3 years and 54k miles -not bad for 2x 'services', 1x brake fluid charge and guessing at 3 sets of tyres (could be more with a heavy right foot)

Exactly what I've done - paying the excess mileage is cheaper than building it into the profile at the start

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