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Over the next few months I’ll be releasing videos and scripts answering the most commonly asked questions when it comes to PCP and PCH. The sort of things that you should be aware of before you enter into the agreement but dealership staff and those pushing out cheap PCH deals can’t advise on because generally they don’t know.

Unfortunately, with high turnover of staff and pressure to ‘close the deal’ dealership staff are not only lacking in knowledge to answer questions about the agreement they are under pressure to sign you up to the finance and insurance products and move on to the next customer as quickly as possible.

The same happens with many of the ‘Sweat Shops’ offering Personal Contract Hire (PCH). They are simply quoting machines aimed at pushing out quotes with no customer support whatsoever once you have signed an order. At the other extreme are professional brokerages who are there to support you throughout the agreement. We fall into this bracket. I have trained dealership and leasing company staff so who better to help you?

So let me cut to the chase, if you’re a driver you want to drive a car of your choice at least cost to you and if you’re a business you want the same.

 

OK so we’re on the same page and I want for you what you want for yourself, a great deal. But how do you find the best deal? I’m the author of a book that explains over 40 ways to finance a car so I’m without doubt the person to help you, the book will be launched later this year in the meantime I,ll be launching a mass of helpful videos that will answer the questions I’m about to raise on behalf of consumers, confused by the finance methods.

 

I’m also here to help you on a one to one basis if you want me and my team to provide you with your next car.

 

So where should you start? Well each and every one of us has different needs when it comes to the car we drive. For some it’s driving a used car because a new car costs so much more to buy, maintain and insure.

 

This isn’t true and I’m going to explain in simple videos how you can be driving a new car for less than a used car and I will also show how a brand new car can cost less in depreciation in its first year than the depreciation if you bought a 1 year old car off a dealer forecourt. Most people will be shocked when they see this video.

 

Service, Maintenance & Warranty

Service and maintenance of a new car over 3 years can be much less than a used car over the same period. As a subscriber and hopefully a customer I’ll show you how to minimise the cost of servicing. Don’t forget you have the cover of the manufacturers warranty which could be very important as What Car found, when they carried out a survey, that 30% of new cars had a warranty claim within the first 4 years.

 

Setting A Budget & Affordability Test

So let’s assume that you are now in the market for a new car, as I mentioned before everyone’s needs are different but the overarching requirement is affordability. You need to set yourself a budget in upfront payments or deposits and monthly payments thereafter. There’s a formula for that which I’ll share as the lenders use something similar when assessing your credit application.

 

High Credit Score Does Not Mean Auto-Approval

As I’ll also explain you may have a perfect credit score but the finance providers are much more interested in your ability to pay the monthly payments known as affordability.

 

Preparing For Credit

You may not be in the market for a new car yet but it’s never too early to start preparing for finance and I have a few insider secrets and little things you can do that could help you improve your credit status.

 

Lenders Don’t Assess You On Your Credit Score

Did you know that the lenders don’t see your credit score, it’s actually an assessment placed on you by each of the 3 credit reference agencies. I explain very simply how you’re assessed by lenders and what to do if you find an error. One little technique will ensure that you are properly assessed by an underwriter, the person who makes the ultimate decision as to whether to grant you finance or not and not just an auto assessment by the computer system.

 

Your One Chance for Approval

As a word of warning you only tend to have one opportunity when you apply for finance. When I first started as a broker over 30 years ago the funder would assess the client and if their application was a little weak they would increase the APR or rental to compensate for the higher risk. That no longer happens – you simply have one shot to be approved or declined so it’s important that you make sure that your credit file is at its best. I help customers to provide extra information that will help a weaker application.

 

Selecting The Best Car At Least Cost

So now you have a budget and you’re prepared for finance, you can now start to consider the type of car you want to drive. Will it be a sporty little number? Maybe you need a car with easy access as you either have a small family to fit into the car including booster and baby seats or maybe an SUV type car to make it easier for either you or elderly relations to get in and out of.

 

Consider The Deals

My suggestion here is try not to be too specific and keep an open mind, especially if you’re considering PCP or PCH also known as leasing. These are the two most popular ways of funding a car at least cost but monthly payments can vary by over £100 when comparing a similar spec. say Toyota Rav 4 to a Mazda CX-5, A BMW 3 Series compared to a Mercedes C Class and so on. The list price of the car can bear no relationship to the monthly payment. I Explain.

I can certainly help with this as I create an ongoing list of deals and offers. So you need to sign up to my list by dropping me an email.

 

How To Get The Must Have Options At Least Cost

You may have a minimum spec. in mind, say heated leather seats and a panoramic sunroof, neither of which is standard on a lower grade car so you can add as factory options. But that may not be the cheapest answer, I give some very helpful advice on this.

So back to the choice of car once you have decided on minimum spec. I can help with this and I’ll explain how you select the right car for you. Maybe you want a cheap runaround but needs to accommodate 4 adults. There are some excellent review sites that I can recommend to you to help you choose.

 

The Importance Of Selecting The Correct Insurance

Before committing to a car and funding method you should check out the likely cost of insurance. I have a few tricks of the trade that will keep your costs down.

 

Minimum Insurance Requirements

You need to understand the minimum insurance requirements as imposed by all lenders whether you take out a PCP or PCH. The car isn’t owned by you nor are you the registered keeper if the car is on PCH. I explain what you need to declare to the insurance company if the car is on PCP or PCH to ensure that you are properly covered.

 

Who Can Drive Your PCP Or PCH Car?

Can other people drive a car that is on a PCP or a PCH? I explain this.

 

Which Is Best – PCP Or PCH?

You need to understand the fundamental differences between the two products, PCP and PCH and the reason why, in most cases, PCH is cheaper than PCP. Why dealers don’t promote PCH and even worse don’t understand the product. I explain all.

 

Exposed – The Truth About Pre-Registered & Ex Demonstrator Cars

Should you choose a pre-registered car or an ex-demonstrator? I explain why one can be good the other bad. There is a downside to a pre-registration car, I explain that it can be overcome and what you need to do.

 

The Dangers Of Taking The Cheapest Rate

Taking the cheapest rate can result in you not receiving the car you thought you were getting. You have to ask yourself why a smaller leasing company can provide cheaper rates than larger companies with larger discounts, cheaper money and better resale outlets achieving better prices for end of lease cars. I explain how this can happen and the dangers you’re exposed to.

PCP Payments To Attract VAT In Future

HMRC have instructed those providing PCP to add VAT to monthly payments under certain circumstances. I explain those circumstances and how the new rule affects you if you take out a new PCP contract. It is quite complicated but I’ll simplify the rules for you.

 

Who Pays For 1^st Registration and Car Tax?

What is First Registration Tax and who pays? Also who pays for the Road Fund Licence  also known as road tax? It differs between PCH and PCP. One leasing company provides Operating Lease which is Contract Hire but treats Road Tax differently. I reveal the company and the rules.

 

Do You Have To Report An Accident To The Funder?

What happens if you have an accident? I explain when you need to advise the funder and when you don’t. Having a write off is distressing enough but how is that dealt with between the funder, the insurance company and you. Who gets paid out and what happens if the amount owed to the funder is higher than the insurance payout? I explain your position and how you can protect yourself.

 

What Is Accident Management & What Are The Dangers?

Should you use an Accident Management company if you’re involved in an accident and can’t drive your car? Do the wrong thing and I’ve seen drivers fighting repair and car hire bills running into thousands of pounds. I explain all.

 

Who Should You Use To Repair Accidental Damage?

If you suffer some minor damage when should you have the damage repaired and is a smart repair acceptable or must you take it to a main dealer. I’ll explain what is acceptable and what isn’t and how getting it wrong could be very costly. I also explain why a different approach is required depending on whether you have a PCP or PCH.

The Dangers Of Free 5 or 7 Day Insurance

When you take out a PCP you are often offered free 5 or 7 day insurance to enable the dealer to register your new car. I explain why you should never take this free insurance. This was the basis of a major story that I wrote for the Telegraph.

 

Annual Mileage Considerations

If you’re taking out a PCP, PCH or if you are a business, Contract Hire you need to decide on your annual mileage as this is critical in calculating the monthly payments. I have some hints and tips and if you are likely to be way over 30,000 miles a year you might be better off taking a finance product that doesn’t restrict your mileage.

 

Comparing Quotes On Different Mileages

When getting quotes you need to understand the profile which includes the annual mileage. Some will advertise very low monthly rates because they are using very low unrealistic mileages. I explain what you need to look out for and how to compare like with like quotes.

 

Comparing Rates – I Have An App For That

When it comes to PCH you will see quotes and adverts showing things like 6+35, 9×47, 6×23, 9+17. Some will show a documentation or arrangement fee and some will show 8,000 milesPA or 10,000 milesPA. I explain what all this is and show my award winning lease evaluation and comparison app used to test and compare different rates and profiles, I’ll explain all.

 

Lies About PCP’s & Excess Mileage Charges

The setting of the mileage is important because some car dealers, in the case of PCP’s, have pushed customers into a low mileage agreement in order to reduce the monthly cost with promises that you can extract yourself from the agreement painlessly without having to pay any excess mileage charge. The Financial Ombudsman doesn’t agree and this could end up with you going to court. Lots of advice here!

 

The Financial Ombudsman – When He Can & When He Won’t Help

Talking of the Financial Ombudsman Service or FOS they are a great resource if you are a consumer or even if you are a small business if you have finance on the vehicle. They will arbitrate and look objectively at a claim if you’ve been treated unfairly but you need to do your homework before taking out the finance. If you don’t the FOS might dismiss your claim without even looking at it because of a legal twist. I explain what that twist is.

 

The Difference Between Service Pack & Full Maintenance & Do You Need Either?

If you take out a PCP you may be offered a Service Pack whilst you are are more likely to be offered a full maintenance agreement if you take out a PCH. You can in fact have either with each product. I explain the differences and how you could be badly misled.

 

Maintain To Manufacturer’s Recommendations – This Will Shock You

The car must be maintained to the manufacturer’s recommended standards. It is not so critical if you take a PCP and own the car at the end of the agreement but it is critical if you hand the car back or you take out a PCH. I explain the implications of having a late or missed service, the meaning of condition based servicing and how it works and what manufacturers recommended standards really means – not what many assume it to mean.

 

Servicing Rules – Where, When, How & The Penalties You Could Be Charged

Can you have the car serviced anywhere? I explain the rules, including one provider who will charge you a ‘penalty’ of up to £1,500 at the end of the agreement if the car hasn’t been serviced at a main dealer or authorised specialist repairer.

 

How To Minimise The Cost Of Servicing

If you don’t take out some form of service or maintenance agreement I have a sneaky little trick to minimise the cost of servicing.

 

AdBlue & Particulate Filters In Diesels – What You Must Know

If you have a diesel car there are two things that you need to know. One is how Adblue works and how you could end up being stranded if you don’t know. The other is the particulate filter, how it works and what you need to do to prevent it from clogging and costing a great deal of money to replace.

 

The Rules Governing Tyre Replacements

Tyres can be an issue. You are likely to need to replace tyres during the course of the agreement but what are the rules? Can you replace with budget tyres or must they be premium brand and if premium brand must they match the tyres fitted by the manufacturer? I go through the options for you.

 

Run Flat Tyres, Punctures & Replacements

Some cars have Run Flat tyres fitted but few people know that they are fitted in the first place, what they are and what happens if you get a puncture. What should you do if you get a puncture, can you have the puncture repaired and can you replace run flats with traditional tyres? I will explain.

 

Who Is Responsible For The Warranty & What Is Betterment – Your Legal Position

As I’ve already mentioned, according to What Car, 30% of new cars have a warranty claim within the first 4 years but whether you take out a PCP or PCH you don’t own the car throughout the period of the contract. So who is responsible for the warranty and satisfying claims? I provide insight into your position. Do you understand what betterment means? You need to if you make a warranty claim as well as your rights under the European Guarantee scheme. I explain this.

 

Speeding, Parking & Other Offences – How Are They Dealt With?

If you take out a PCP you will be shown as the registered keeper of the car which means that should you comit an offence, i.e. parking or speeding, you’ll receive the notice direct from the police or local authority and you will normally be given a short period to pay and claim a discount from the full penalty. However, this isn’t the case with PCH where the leasing company is the owner and registered keeper. I explain the implications and how this can result in heavy costs to you which can run into hundreds of pounds.

 

Safety Recalls – What Is Your Position, Could You Be In Danger?

Safety recalls are an issue when you have a car on PCH. If you have a car on a PCP you will be contacted as the registered keeper but in the case of PCH the leasing company is the registered keeper and therefore responsible for letting the drivers know. The dangers to drivers, passengers and insurance implications will all be explained as well as how to check for recalls.

 

Ownership Rights In PCP & PCH – What Are The Rules?

Can you sell a car that you have on a PCP before the end of the agreement? I explain whether you can or not and the process you must go through. If you have a PCH you don’t own the car so you can’t sell it. I explain.

 

What Happens To Your Payments If You Lose Your Licence Or Can’t Drive – My Solution.

What will happen if you either lose your licence or through an accident or medical condition you can no longer drive? What happens about the payments and is there a solution? There is and I explain all.

 

Move Or Change Jobs – Can You Adjust Your Annual Mileage?

Similarly, what would happen if, like me, you had an operation which may not prevent you from driving completely but could reduce your annual mileage. Or you may change your job or where you live and find yourself driving more or less mileage – can you adjust the monthly payments accordingly, either up or down? I’ll explain all.

 

Can You Terminate Early A PCP Or PCH – Yes To Both I Explain

Can you extract yourself from a PCP or a PCH during the agreement? The answer is yes to both but you deal with them completely differently, I explain how each is treated and what you need to do.

 

The Truth Behind Voluntary Termination Or The PCP 50% Rule – Highly Dangerous, I Explain

Have you heard of Voluntary Termination also known as VT or the 50% rule. This enables you to extract yourself from a PCP at least cost. I explain this in detail as it’s complicated. Dealers often mislead consumers as to how it works.

 

Voluntary Termination & The 50% Rule – DON’T Complain To The FOS, They Have It Wrong

There are excess mileage complications which I explain and also explain how the Financial Ombudsman got it wrong in a ruling on the subject.

 

Taking A PCP Or PCH Car Abroad – The Rules Explained

Are there any restrictions on taking your car abroad as you don’t own the car whether the car is on PCP or PCH? I explain how the rules may vary and the implications whilst we are still in Europe.

 

Can You Extend A PCP Or PCH Beyond The End Of Your Agreement – Beware Of Mercedes!

At the end of a PCH you generally hand the car back to the leasing company. Some will allow you to extend the lease agreement either casually with no fixed extension term or a fixed term for say 6 months or 12 months. I’ll explain the process and the downsides to extending.

 

Buying Your PCP Car At The End Of The Agreement – Some Amazing Money Saving Advice Here

With a PCP it is less likely that you will be allowed to extend the agreement but you can buy the vehicle at a predetermined price set at the beginning of the agreement known as the Guaranteed Minimum Future Value referred to as a balloon payment. I go through this and explain why it may be worth buying the car when it isn’t worth the final balloon payment.

 

Handing The Car Back At The End Of A PCP & PCH – How To Reduce The Charges

80% of cars on a PCP are handed back to the funder at the end of the lease so you need to be prepared to hand the car back with all the end of lease implications. I take you through all of these and how handing back a PCP car can be different to handing back a PCH car. I explain how you can minimise the costs.

 

Avoiding An MOT & Service Before You Hand The Car Back

I have a little technique that you can apply that will possibly avoid having your car MOT tested or serviced before returning it.

 

Something You Must Do After Making Your Last Monthly PCP Or PCH Payment

This is something very simple that you must do after making your last monthly payment that will avoid you being overcharged for repairs, missing or late services and/or excess mileage.

 

Excess Mileage Charges, The Stepped Charge & VAT – I De-Mystify

I also explain what you should do to prepare for excess mileage charges at the end of the agreement and what some PCP providers do to confuse you.

 

Free Membership To Our Regular Blog Keeping You Up To Date With News, Views & Regulations

Finally, as a customer of GHA Finance you will be subscribed to our blog with latest news and views from industry experts and some great hints and tips along with legal changes and environmental advice.

 

More Videos To Come Including New Tech Explained, Environmental Issues, Case Histories, Financing Used Cars & Much More.

These videos will cover most of the critical situations you need to either take into account or prepare for. As I’ve pointed out only a very small part of a PCP agreement is covered by our laws and even less of PCH agreements so with so much of what you sign covered by the individual contractual terms it is difficult for me to cover every possible term, condition and eventuality. You should carry out your own due diligence before signing an agreement unless I am the provider then we take over many of those responsibilities.

 

More videos will be added in due course so you need to subscribe. Instructions will follow.