What is Personal Contract Hire?

What is Personal Contract Hire (PCH)?

Personal Contract Hire (PCH) is a form of car leasing that allows you to drive a new vehicle for a set period without owning it. You make an initial payment followed by fixed monthly instalments, and at the end of the agreement, you return the car to the leasing company. It's a flexible option for those who want to drive a new car without the responsibilities of ownership or depreciation concerns.

How does PCH differ from PCP (Personal Contract Purchase)?

While both PCH and PCP involve fixed monthly payments, the key difference is ownership. With PCP, you have the option to purchase the car at the end of the agreement by paying a final lump sum, known as a balloon payment. In contrast, PCH is purely a leasing agreement, so there’s no option to buy the car—you return it at the end of the contract.

What are the advantages of PCH?

PCH offers several benefits, including lower upfront costs and predictable monthly payments, making budgeting easier. There’s no need to worry about the vehicle’s resale value or depreciation, and you can enjoy driving a brand-new car every few years. Additionally, maintenance packages are often available to help cover the cost of routine servicing.

What are the terms and conditions of PCH?

With PCH, your contract typically lasts two to four years, and you'll agree on an annual mileage limit at the start. Exceeding this limit may result in additional charges, as will any damage beyond normal wear and tear. The car must be insured with fully comprehensive cover, and there may be penalties for early termination of the lease.

Who is eligible for Personal Contract Hire?

PCH is available to both private individuals and businesses, but you will need to pass a credit check to ensure eligibility. Generally, applicants should have a stable income and a good credit history. Whether you're looking for a personal or business lease, PCH can offer a cost-effective solution to driving a new car without the long-term commitment of ownership.