Fleet News

Leasing group warns of dangers of PCP schemes

CLAIMS that personal contract purchase schemes could become the widespread alternative to the company car if Budget changes in the spring result in significant benefit-in-kind tax changes have been dismissed by Masterdrive Leasing and Rental Group. While acknowledging that PCPs perform 'a valuable role as a niche product' the company has warned that PCPs are not 'the panacea they have been made out to be'.

However, Masterdrive has warned that moves to promote personal schemes to encompass the majority of vehicles within company fleets could not only cause serious logistical problems within a fleet industry geared to dealing with corporate customers rather than individuals, but could create other detrimental effects. General manager Tony Elliott said: 'If PCPs are widely adopted, then there are enormous problems to resolve, such as the levels of sales force required by leasing companies to cope with a fragmented customer base, with volume discounts being treated as benefit-in-kind on individual schemes, unfair wear and tear, bad debts and what happens when an employee changes jobs or becomes redundant.

'Leasing companies also will not be able to expect the same return business from individuals who quite naturally have no particular loyalties to suppliers and whose criteria for vehicle acquisition are diverse and frequently difficult to predict. We should be very cautious about pushing them too hard to a broader market.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee