Finance’s Kurt Bradbury gives his observations of the PCP market
- Manufacturer finance companies
are reporting up to 85% penetration on new PCP versus other forms
- Franchise dealers are now
looking to develop used car PCP as a means for better customer
retention and to combat the direct lenders. Penetration of used PCP
into total sales is a fraction of that of new, with the main reason
being lack of marketing support from manufacturers. HP has been the
traditional first offer for used in the showroom and this habit
remains very difficult to break.
- Only three of the six top
independent finance companies offer a genuine PCP product with
guaranteed future values. HP/personal loan products with a balloon
are not PCP and do not have a guaranteed value.
- Manufacturer used PCP products
are less flexible than new and are not supported with offers or low
- Independent PCP providers vary
in the GMFV values and the way they are calculated. Some use a
percentage of CAP future value, some use their own contract hire
data to set GMFVs.
- Contract hire GMFVs are
normally much higher than CAP future based GMFVs.
- There remains a huge disparity
between GMFVs with differences being up to 30% based on identical