Car finance plans come under attack

Finance schemes credited with reviving the retail car market have been slammed as misleading by leading industry figures.

Personal Contract Purchase (PCP) plans were introduced four years ago to support flagging retail sales during the recession. An estimated 100,000 cars were purchased using the plans last month.

Manufacturers have spent multi-million pound marketing budgets on promoting schemes like Vauxhall’s Choices 1-2-3 and Ford’s Options. But several motor finance sources now believe the schemes mislead and will be phased out to make way for leasing schemes.

In PCP schemes, consumers put a deposit down on a new car, pay a variable fee for the two or three years of the contract, and then buy the car at the end of the contract if they want it by paying the remainder. But critics say consumers have been misled and are often left with less money to put towards another new car than they had expected at the end of the contract.

“Many PCPs have been sold with what could charitably be described as ‘enthusiastic naivety’,” says Derek Pridmore, marketing director of HSBC’s Swan National motor finance. “The industry is going to take some serious flak when the realities of many PCP contracts become clear.”

It is a view echoed by Denis Keenan, head of the newly established contract hire division of the Vardy dealer group, Vardy Contract Motoring. “PCPs have been a slightly unethical aberration designed to hide the true costs of motoring. The complexity and small print of PCPs are blackening the name of vehicle finance.

“Manufacturers want people to think they can run a new car for 100 per month – but everyone in the trade knows you can’t,” says Keenan.

News Analysis, page 18

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here