PCP Contracts? Has anyone got one?

[isam]

Thanks for reading my post.

Lately I have heard of this new financing method (new for me, and for SL, since I have not heard of such offer In the past) called PCP (Personal Contract Plans). Apparently it is a sort of paying a down payment for a car, and then paying monthly rental. But the ownership will not transfer to you until you pay the balance amount at the end of your contract. The details are kind of sketchy, and I'm on the look out for more details. If you know or already got an agreement, or you have had one in the past can you share the pros and cons you see in getting into a PCP?

 

Edited April 6, 2018 by isam

[isam]

Found this article online. Posting for the benefit of everyone:

https://www.rte.ie/lifestyle/motors/2017/0603/880092-warning-about-regulation-of-pcps/

[Quiet]

I think it is just a operating lease where the lessee do the maintenance (Not sure but its called a Dry operating lease). Lease will be set for net of your down payment while there also will be a final ballooned residual installment. After paying that the vehicle will be transferred to you. This is normally used to circumvent the Loan to Value ratio set by Central bank of Sri Lanka.

Do not know about interest rates charged on such facilities and i presume it to be relatively high.

[TDS]

Im also interested to know more about this. I contacted one company and the understanding given to me is 

- you pay a downpayment

- the vehicle will be owned by the finance company

-you pay the monthly lease which is less than the nornal commercial lease installments

- the lease period is short term- like 3 years

-at the end there is a balance to be paid- which is generally 50% of the value of the vehicle. At this point you can decide to sell the vehicle or settle the balance and keep the vehicle to yourself.

Since that company has a considerable online presence, i believe there may be others who have got vehicles from there.

Is there anyone willing to share their experiences? Are there hidden costs/risks? 

Much appriciate your valuable insights snd experiences

[Devinda_Z]

Sounds decent if you want to defer payment or manage cash flow but in absolute terms one will end up paying out a fair bit, especially if whatever is bought depreciates heavily right?