Brokers better set for PCH than dealers, says Central Contracts

CENTRAL Contracts, the independent contract hire and leasing broker trading as LeaseCar.uk, says that brokers are ‘perfectly positioned’ to fill the market gap for personal contract hire created by dealerships focussing on HP or personal contract purchase (PCP) deals.

While the last BVRLA leasing survey saw PCH dip 13.4% year on year, Central experienced growth of 57% in PCH deliveries in the last year, with compact SUVs the top choice.

Gareth Roberts, strategy director at Central Contracts (above), said: “We’re finding many new people coming into the market, delivering about 60% more cars on PCH, because they are happy to lease cars online and the experience is better and more convenient than going into a dealership.”

"Dealers aren't geared up to do personal contract hire; they're only really offering their hire purchase purchases or PCPs. Brokers sit nicely in that gap in the market. Customers want cars at affordable rentals, so PCH is the perfect product for that.”

Gareth Roberts, strategy director, Central Contracts Tweet

He continued: “Customers don’t particularly want to go into a dealership and test drive things nowadays because they research all details online. But what they do value is human interaction, being able to chat with a broker about the car choices, spec, how PCH works, and other concerns.”

Central Contracts aims to speak with every customer, building relationships that boost renewals. It says that this personal contact also ensures due diligence, confirming financial suitability and identifying any vulnerable individuals.

While major leasing companies are already exploring this space, indicating a growing industry recognition of the potential growth of PCH, it also underscores the vital role of brokers in the market.

“With PCH you’re effectively renting the vehicle for a certain period of time and if the customer opts for a maintenance package, it all becomes hassle-free. The customer is just driving the vehicle, insuring it, putting fuel (or electricity) in it, and then handing it back and getting something nice and shiny in another three years’ time. This has been growing quite rapidly for the last 10 years.”

Used car PCH opportunity

While new cars currently dominate the PCH market, Gareth sees a significant opportunity in used car PCH, particularly for petrol and diesel vehicles following the 2035 ZEV Mandate deadline.

He added: “Once the 2035 deadline hits and there are no more new petrol and diesel vehicles being sold, I could see there being a real interest in PCH in used petrol cars. Not so much on the used EVs initially because of the strength of the new deals, but this deadline presents a massive opportunity for brokers, especially as dealers have never really engaged in PCH particularly well and neither have the manufacturers or the funders.”