It is the way eight out of ten motorists finance their new cars, but are Personal Contract Purchase deals good value for money – especially for people considering buying an electric vehicle (EV)?
In the 12 months to October 2023, some £17bn was loaned by financial institutions to motorists looking to purchase a new car.
Of these, one in five new cars sold in Britain is an electric vehicle. According to the motor industry, some of these, such as the Seat Mii Electric, are losing more than half of their value within 12 months.
This collapse in value is prompting concern among financial experts.
Derren Martin, cap hpi’s director of valuations said there are many reasons behind the collapse in EV car prices.
He told This is Money: ‘Range anxiety became an issue once more following a number of unfavourable reports surrounding queues of two to three hours over the Christmas period, particularly at motorway service stations.
‘Then there was the cost to charge. With prices of electricity having increased and fossil fuels reducing over recent months, it was no longer clear-cut that it was cheaper to charge your EV than it is to fill up your ICE [internal combustion engine] car.
‘This all happened at the same time as vastly increased volumes returned to the used market, from registrations starting three years ago.’