Given the increased spotlight based on the studies that are being carried out by the Financial Conduct Authority (FCA) on PCP car finance deals, it has led some to question their appeal in the first place, wondering aloud what would attract drivers to such plans. Well, there is nothing wrong with PCP car finance itself, merely a selection of those tasked with making these deals happen for motorists. Here, we will cover the main benefits that attract drivers to signing up for PCP car finance plans.
The first reason is the simplest: sustainable, staggered payment packages allow drivers to pay for cars over a long-term period, as opposed to having to make a one-off purchase. Rather than putting themselves in a financial hole by splashing out five figures on a motor in one go, they are able to pay a fixed amount for a mutually-agreed length of time, up to the point where the vehicle will have been completely paid off. This may take one year, three years, five years or seven years, but either way, the driver is able to cover the purchase through a structured deal that is beneficial to all involved.
The second reason is related to finances in a different form. Because the car will be paid for over the course of several years, this has an impact on the price of the vehicle, partly because in an ideal scenario, the dealership and/or the finance company are able to provide discounts that would not be in place if the vehicle was being bought outright. Extra incentives are thrown in to get the deal over the line, and this includes dropping the price enough to satisfy all parties. This doesn’t always happen, and as our name PCP Mis-Sold suggests, there are many times when events transpire in the completely opposite direction, but it does act as a way to attract drivers into signing up for such purchase plans.
The final reason is that entering a PCP car finance deal opens the door for many more potential vehicle options for drivers on two fronts. One of those is that the month-by-month payment system allows them to consider motors that would otherwise have been out of their price range, especially if the deal is maxed out to a seven-year period. The other concerns the stock that these dealerships have, because they could say that “X” car will cost “Y” amount, but by going for a slightly older, more experienced model from the “X” range, the cost would then be “Y minus Z”, which suddenly makes it a more affordable option. All sorts of deals such as this example are available, and PCP car finance allows them to happen.
So, as you can see, there are a fair few major reasons why drivers would be attracted to PCP car finance plans. Find out more here pcpmissold.co.uk.