Traditionally in the UK we are used to buying cars outright, or on Hire Purchase. Ultimately, we own the car but have paid a high price for it, including a large deposit with the order. More recently there has been a move to Personal Contract Purchase (PCP) where the customer typically owns the car at the end of the contract – by paying a large ‘balloon’ payment – or they can just choose to walk away or start a new contract.
However, in the last few years there has been an increasing trend towards leasing (also known as Personal Contract Hire or PCH) – in which the customer typically gives the car back at the end of the finance period, but in return gets to drive a new car with a reduced monthly outlay (there being no balloon payment required, and typically a relatively small initial deposit).
Fuel Included Limited provides new cars to its customers on PCP or lease/PCH. There is a fixed term contract (usually for 2, 3 or 4 years) where you pay a charge for the use of a plug-in vehicle for a given monthly mileage. Uniquely, with Fuel Included™ the monthly charge includes the electricity needed to cover an agreed mileage so there need not be any additional fuel costs.
Benefits of PCP/Leasing
The key benefits of PCP or leasing compared to outright sale or HP are therefore:
- Flexible initial payment
- Fixed term contract
- Fixed mileage contract
- Fixed cost motoring (this is particularly true with a Fuel Included™ car)
- Flexible mileages to suit you (e.g. 9000 or 12500 miles per year, or whatever you need)
- You only pay for the use of the vehicle
- At the end of your contract you simply hand the vehicle back or, if on PCP, you have the option of keeping it
- Option of including maintenance with the contract
- No depreciation or disposal risk
PCP and leasing are of particular benefit for plug-in cars since depreciation rates for plug-in cars purchased outright are not easily predictable but are likely to be high. For sure, in 3 or 4 years time plug-in cars will have longer ranges and better specs than now so it may be hard to get a good resale price for a car bought outright. Conversely, when a Fuel Included contract for a plug-in car expires you can simply upgrade to the latest model.