Only 53% of drivers understood the T&C’s of their last car finance deal
Research commissioned by Europcar Mobility Group UK reveals that many motorists don’t understand what a car finance deal does and doesn’t include.
Some form of credit is used by many motorists to finance a car purchase. Yet new research from Europcar Mobility Group UK reveals that, of the drivers who have previously used car finance, only 53% admitted to fully understanding the terms and conditions of the deal they signed. There also seems to be confusion about what is – and isn’t – included in a car finance deal.
In particular, there is a misperception of what’s included in a Personal Contract Purchase plan (PCP). Almost a quarter (23%) think breakdown cover is included, with nearly 1 in 5 believing servicing is part of a PCP. These are rarely included in a PCP, yet they can be significant costs associated with vehicle ownership that need to be budgeted for by motorists.
Tackling the confusion – and providing motorists with a flexible way to drive a new car without any of the hassle of ownership that comes with other forms of finance – Europcar Mobility Group UK, with the Europcar brand, has launched a new way to ‘use’ a car – Long Term Flex.
Designed to give drivers an all-inclusive motoring solution, Long Term Flex offers brand new cars – without having to commit to a 3-5 year finance agreement or outright purchase. Flexibility is key. Drivers simply choose their desired vehicle from a wide range of models, their length of term for a minimum of 6 months and preferred mileage and they can get on the road without any big upfront payments.
“Our latest research shows that having access to a car is vital – over half (57%) of those we surveyed use their car every day”, explained Gary Smith, Managing Director, Europcar Mobility Group UK. “However, the typical 3-5 year finance deal is a financial pressure that some may prefer not to have in the current economic climate.
“Long Term Flex offers the freedom to take a ‘holiday’ from car ownership for a period of time – perhaps if circumstances change – or the driver is literally going on holiday. And there’s no penalty for taking a break, unlike the hefty early termination charges typical of conventional car finance deals.”
The long-term financial commitment of a PCP was also misunderstood by respondents to the research. Less than half of motorists (45%) correctly identified that at the end of a PCP a final payment must be made to take ownership. And almost a quarter (23%) admitted to not being sure if they could take ownership at the end of a PCP without making a further payment.
Unlike traditional leasing contracts, Long Term Flex offers drivers the flexibility to opt out of their contract after just 6 months without any early exit penalty. And they can buckle up for up to 18 months on the road, after which it’s easy to repeat the process and pick up a completely new car.
TV personality, radio presenter and self-confessed savvy-shopper, Gaby Roslin who worked with Europcar on its campaign said, “With a leasing deal you have to fork out for your monthly payment, a balloon payment at the end of the three years and you have to pay for maintenance and then roadside assistance too which can be very costly. Long Term Flex from Europcar is fantastic because you get maintenance, servicing and road side assistance all included – all of the things we don’t budget for. Plus, you can easily take a holiday so if you’re going away you don’t have to pay for a car that you’re not using – you also get to drive away with a new car every six months which is great.”
The flexible service offers a variety of models – such as the popular city car Fiat 500, the hybrid Hyundai Ioniq or the new Mercedes A Class – with a choice of 1,000 or 2,000 miles per calendar month, enabling drivers to opt for the most suitable solution without paying for excess mileage. And Europcar delivers the car straight to the customer’s front door at the start of the agreement.
“Long Term Flex resolves the challenge many drivers face balancing costs against ownership”, added Gary Smith. “From commuting to work to tackling the school run, having access to a vehicle is essential for many. And with Long Term Flex we are providing drivers with a flexible option that cuts out the uncertainty of ownership – servicing and maintenance – while giving them access to brand new cars.”