Car Finance Packages Gain Popularity, But Confusion Over Terms Muddies Market
The UK’s car market has recovered well following the recession, with new sales increasing as the popularity of leasing deals and contract hire financing packages rise.
However, it seems that many people in the UK are not familiar with exactly what is involved in the deals that they are signing with companies, as evidenced by a new survey from the BMW Group Financial Services.
Just under a fifth of those questioned were capable of adequately explaining the different between personal contract hire and personal contract purchase packages. And analysts say that this is concerning given that over three quarters of all new cars sold in the UK take advantage of finance from dealerships.
Motorists can make savings when they seek out well priced finance packages, which is why many choose to try Totalmotion who offer car leasing in Leicester. But it is apparent that more needs to be done to educate consumers about the types of offers that are available and the phrases used to describe and define particular products in this expanding marketplace.
The BMW study identified several key areas of misunderstanding that are being perpetuated in the industry at the moment, chief among which is the nature of personal contract hire. In brief a PCH package involves renting a vehicle with upfront monthly payments as opposed to paying for it in full at the start.
GAP insurance is also not something that most motorists are au fait with, in spite of the fact that this can protect them from the financial repercussions of a vehicle being written off while they are still in the process of paying back the loan they received to cover its costs.
Motorists in the UK certainly have a lot to take in over time, especially with recent changes to the car tax system and licensing, with DVLA systems being somewhat overloaded by visitors trying to work out what changes have taken place.
While levels of comprehension could do with increasing to make the automotive finance sector a little less obtuse to the average car owner, the industry itself is continuing to enjoy solid growth.
The BVRLA reported a 20 per cent boost last year as leasing brokers play a bigger role in determining the shape of the market.