Flexible rental packages are growing in the
private car market, according to Volvo.
The Sweden-based, Chinese-owned manufacturer
has logged a record number of contracts in retail motor finance,
including personal contract hire (PCH), across the UK, as demand
for outright car ownership diminishes.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Personal, rather than business, contract hire
made up 28% of all leasing business for Volvo in October, an
increase of 66% on October 2010. Leasing business as a whole was up
by 68% across the month compared to the same time in 2010.
Volvo said that PCH, which the company has
offered since 2009 with a variety of total mileages that a car may
drive while under contract, had never been so popular.
Although the key selling point of PCH is that
takes away the worry of residual value of the car for the customer,
Tony Grice, Volvo UK’s training and field manager, ascribed the
rise to the appeal of fixed monthly costs in tight economic
times.
“A competitive rental figure that incorporates
a maintenance package means we have a practically unbeatable
value-for-money proposition,” he said.
“We are seeing a mentality similar to that of
paying a monthly rental for a phone and upgrading on a one-two year
basis.”
“Increasing numbers of people are opting for a
fixed monthly payment which enables them to upgrade their vehicle
every two or three years, added Grice.
The company continue to offer hire purchase
and personal contract purchase products as alternatives but ensure
that their dealers and dealerships tailor finance to suit the
specific circumstances of the consumer, according to Chris Mullord,
Volvo spokesperson: “All sales staff are aware of the different
types of funding packages available to our customers to suit their
personal circumstances and, by qualifying the customer correctly,
are able to offer the best funding option available.”
richard.brown@vrlfinancialnews.com
