People use PCP or lease because they want a newer car than they can afford to buy with cash. I suppose it also takes away some of risk of depreciation but then the depreciation costs are built into the monthly amount so you are still paying what they assume the depreciation will be.
Up to the consumer at the end of the day.
Is the list price realistic?
The list price seems to be applied more stringently for cars that are new designs and desirable like the Renault 5. These cars are in a 'honeymoon' period where people have to queue for a car and the manufacturer struggles to meet demand.
After a few years the car isn't so desirable any more and discounts get applied to shift the stock.
For Chinese cars this period seems to last only a few weeks because most people are (wrongly) wary of the quality of Chinese cars and so there is not the same pent up demand.
So why do companies keep the list price at its original level and not just reduce it gradually as the demand drops off?
1. Prestige? Don't want to look like a 'cheap' or desperate brand.
2. Financial reasons? Manufacturers know that the high RRP gets used to calculate various government subsidies and salary tax deductions and things like that, so a higher price means higher benefits/deductions. Consumers and manufacturers benefit from this higher list price, but in reality few people pay that amount after the initial 'honeymoon' period for the car.
Also, if people expect car prices to fall after a few months they might be inclined to wait around for that to happen rather than buy up front, and then the manufacturer doesn't get that 'honeymoon period' boon. I think this has happened to the Chinese brands - people expect the prices to drop quickly so it becomes a self-fulfilling prophecy.
Basically I tend to think that the official price is inflated overall.
