Personal Leasing or Personal Contract Hire (PCH)

This is effectively a long term rental agreement, whereby you agree a fixed monthly payment to use a car for a set term and mileage. Servicing and Maintenance may be included or charged separately check the agreement carefully

PCH is suitable if you

• If you want a new car every few years but don’t want to own a car
• If you want fixed price car ownership
• Confident that you will not need to end the contract early
• Confident you will not have adverse changes in finances that might mean you cannot afford the payments.

Key Features

• fixed monthly cost without concerns regarding unexpectedly severe depreciation
• usually require a deposit (typically 3 months payments).
• you do not own the car or make payments towards owning the car at the end of the agreement you hand the car back

• you may incur additional costs if you exceed the mileage limit, therefore it is important you can accurately estimate what your mileage will be
• you are responsible for the upkeep of the car whilst you are leasing it, this includes servicing and maintenance
• usually there are no options to repay or end the contract early without incurring large fees or being required to pay the total of future lease payments

Personal Contract Hire (PCH) also known as Personal Leasing

This type of contract is like a long term rental agreement with fixed monthly payments. Servicing and Maintenance can be part of the agreement or be charged separately.

At the end of the agreement you simply return the car and handback the keys.

The Benefits

• Monthly repayments tend to be lower than if buying
• Fixed price motoring if you include the servicing and maintenance option
• Protection from unexpected depreciation.

The Drawbacks

• You will need to agree an annual mileage limit and will be charged if it is exceeded.
• Throughout the term you are responsible for the upkeep of the car, if not returned in good condition may be charged.
• There are no options to repay and end the contract early without large fees.
• There is no option to buy at the end of the contract .

Personal Contract Hire may be suitable if you:

• Do not want to own the car
• Want a fixed monthly payment to cover most of your motoring costs