Most are renewing their PCP deals
As a sign of how PCPs have taken over swathes of car buying territory these days, Volkswagen executives here say three-in-four people on their Personal Contract Plans are renewing for a subsequent car deal.
With sellers and buyers growing more accustomed to the ins and outs of what can be a PCP maze, the experts have also told us that the optimum average deposit is 22pc.
Nearly four-in-10 (38.5pc) VW car sales last year were financed through Volkswagen Bank – that includes car rentals. And 65pc of those deals were in the form of PCP.
There is further evidence too that people are buying much higher-spec cars.
A Volkswagen executive revealed that 61pc of PCP sales are what they call third-level, or Highline trim. While these cars are more expensive, the company is using a lower interest rate on PCP (1.9pc) to encourage potential buyers.
After paying a slightly larger deposit, the monthly repayments work out at exactly the same as less-well-equipped cars – the difference being that the latter are on higher interest levels.
It is also becoming clear that a deposit of 22pc of the car’s price is the best target as it means buyers are far less likely to have to put any of their own money towards a fresh/subsequent PCP deal for a new motor.