PCP proving hugely popular with younger buyers
Younger buyers are opting for PCP deals for small cars in a bid to get their foot on the motoring ladder, according to information provided by leading car buying website Askaprice.
Data from Askaprice shows that the number of people looking for PCP deals on small cars such as the Volkswagen Up! and Skoda Citigo has rocketed over the course of 2012.
The Ford Fiesta was one of Askaprice's most popular cars, with just under a quarter of all enquiries from potential buyers looking to get the car on a PCP basis.
Audi's A1 also saw similar figures, while more than 25 per cent of Vauxhall Corsa enquiries were from people weighing up a PCP option for their car. A third of Renault Twingo buyers wanted to pay for the car via PCP.
Our very own MotorTorque Expert is in no doubt that PCP is the future of car sales. "PCP is a great option for people that want to spend less money on their car on a monthly basis, who are flexible enough to trade it for a new car every two or three years.
"Though people are effectively paying more interest over time with a PCP deal when compared against a hire purchase, the option to use the equity to get a new car obviously appeals to people looking for a small, affordable car - especially younger buyers.
"Dealerships like the method because the money goes to them and they get to sell more cars, negating the need for franchised dealerships. Take Peugeot, for instance, who have extended their Just Add Fuel option. Why? Because it's obviously getting them results!"
PCP-lly good deals
Volkswagen has admitted that finance packages such as PCP are proving popular and that it's something the company is looking to push. They say, though, that they're not looking to target a specific age group and were keen to emphasise the brand's message of value.
"Certainly we've been increasing our amount of finance and fixed price servicing packages over the last couple of years, and it's not just about younger buyers but anyone who wants fixed budget motoring and an affordable monthly payment," comments a Volkswagen representative.
"We are also able to vary the kind of terms we offer on PCPs so we ensure there is something available for people with a larger or smaller deposit and corresponding monthly payments etc.
"In other words enabling us to personalise packages to suit all consumers, who are shopping for a whole range of cars, and have different personal finance situations."
But what about up-and-coming small cars? Are PCP strategies in place for newer models? Vauxhall was playing its cards close to its chest when we asked what kinds of financial packages it was considering for their upcoming Adam, and whether the company would make a point of targeting younger drivers.
"Adam customers will not be taking delivery of their cars until February 14 next year, so we will not be advising on PCPs or any other finance packages until later this year."
Written by John Meadowcroft