A leasing broker’s call for drivers to abandon dealership finance highlights the need for clear comparisons of costs and ownership options.
LeaseCar, recently rebranded from Central Contracts, has urged motorists to approach cars like mobile phone contracts, paying a fixed monthly amount before returning the vehicle.
However, its criticism of personal contract purchase (PCP) overlooks features already offered through car dealers.
Dealer and OEM captive finance teams can also arrange PCH deals for retail customers that are looking for a different product that fits what they need.
Broker argues for monthly-budget approach
Gareth Roberts, strategy director at LeaseCar, offered his opinion that drivers should focus on the cost of using a vehicle rather than its future resale value.
He said: “Nobody buys a mobile phone expecting it to hold its value forever.
“You don’t sit around stressing over what it’ll be worth in three years’ time, and you certainly don’t haggle over its trade-in price in a shop. You just pay a clear monthly bill, enjoy the phone, and upgrade when your contract is up.”
Roberts presented leasing as an alternative for customers who want predictable payments without committing savings to vehicle ownership.
He said: “Drivers are fed up with haggling over confusing finance deals, interest rate surprises, and huge balloon payments at the end of PCP agreements.
“With household budgets stretched and car tech changing faster than ever, people don’t want to lock their savings into a car that loses value the second you drive it off the forecourt.”
However, fixed monthly payments and the ability to return a vehicle at the end of an agreement are also established features of PCP.
The optional final payment allows customers to take ownership. Those who complete the agreement and return the vehicle in accordance with its terms do not have to pay it.
Simpler explanations still matter
The useful lesson for dealer finance teams is the emphasis on explaining how a product fits a customer’s budget and plans for the vehicle.
Clear comparisons can show the upfront payment, monthly commitment, total expenditure, ownership position and return conditions together, alongside any optional services or additional fees.
The Financial Conduct Authority’s (FCA) consumer understanding guidance encourages firms to use plain language, place essential information upfront and test whether communications help customers make informed decisions.
It also stresses that risks and limitations should receive appropriate prominence alongside benefits.
For business managers, finance directors and captive lenders, that provides a practical basis for reviewing customer explanations without accepting that one funding method is universally preferable.
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