Manufacturers are eagerly promoting PCPs as a means of engendering customer loyalty, and offering dealers extra profit opportunities with the sale of gap insurance. Malcolm Hill, managing director of VWFS, said: 'With our own PCP scheme Solutions, repeat purchasing is anything from three to four times greater than it is with hire purchase. If this trend continues it shows that the customer loyalty aspect of the PCP works and the investment in training, marketing and technology by the manufacturer and finance company is paying off.'
But he warned customers to beware of schemes which offer a low monthly payment by quoting a large deposit with a large final payment. He said: 'I believe this will result in a very unhappy customer once they realise there is very little value in the vehicle at the end of the contract.'