One example is the automotive subscription product. Genuine subscription rewards consumers willing to commit to a longer-term arrangement in the form of lower monthly payments, in much the same way that a longer lease deal costs less per month than a short-term lease. Most subscription products offered in the UK today are based on a PCH (personal contract hire) arrangement, which legally speaking is a lease. Customers are attracted by apparently competitive monthly payments, a concept familiar to them from their typical three- to four-year PCPs, though experience with PCP has also shown that the majority will change their vehicle before the end of the contract. Until recently, many customers went further and exercised their right to a ‘voluntary termination’ (under the Consumer Credit Act), returning the vehicle when only ‘half-paid’, even if this trend has diminished of late due to the boom in used-car values resulting from new-car supply restrictions.
