Deal to promote car ‘usership’

Personal contract leasing is big business in many parts of the world, but here in SA it has not really taken off, in spite of the best efforts of many finance houses and car makers.

It is a product that is evolving with some companies like Volvo looking at taking it another step further to become a subscription model in the same way you subscribe to a cellphone contract.

We are a number of years away from that here in SA though and in the meantime some people are choosing to switch from financed ownership to more of a usage deal.

Jaguar Land Rover (JLR) is the latest to introduce such a package in the form of its Guaranteed Future Value finance product, giving customers the opportunity to step into a new Jaguar or Land Rover every three or four years.

The company says that buyers will know right from the start of their finance contract what the guaranteed future value of their vehicle will be, allowing them to plan ahead with an option to either renew, retain or return the vehicle at the end of a pre-determined term.

“This product will appeal to a changing customer — a customer who wants no risk at the end of the term,” says Viola Roussow, financial services manager at JLR SA. “A customer not interested in ownership but rather ‘usership’. A customer who wants to drive a new vehicle every three or four years.”

The Guaranteed Future Value product is as simple as selecting a preferred model, choosing the period of use, distance (km) and deposit. At the end of the term, a customer will have three options. The first is to renew the deal by using the promised value as a trade-in value on another JLR model.

The second is to hold on to the car by paying the guaranteed future value amount, which effectively becomes a balloon payment. The customer could also re-finance the vehicle.

Or, provided payments are up to date, you could just hand the car back and Uber home.