Personal Contract Hire

Personal Contract Hire (PCH) Explained

Personal Contract hire is for personal users who want the ability to change their vehicle when the contract hire deal expires, these can be between 18 and 60 months.
It is an agreement between the personal user and the personal contract hire finance company, all leasing and contract hire agreements are subject to a credit search.
There are lots of finance options to choose from with personal contract hire being one of the most popular.
One of the main reasons personal contract hire is so desirable is that you can change your vehicle for a new one without the large outlay of a big deposit. Most ‘deposits’ or ‘initial payments’ can be as little as 1 month’s payment.

The way personal contract hire works:
you state your expected annual mileage at the start, the personal contract hire company then work out the expected ‘residual’ value of the vehicle at the end of the agreement, (basically what they think they can sell the vehicle for with the age and mileage at the end of the contract) this ‘selling price’ is then deducted from ‘purchase price’ this difference, along with their profit/admin charges is added together , then divided by the amount of months the personal contract hire agreement is to run and hey, presto! Your monthly personal contract hire payments have been calculated.
At the end of the personal contract hire period you don’t have the worry about selling the vehicle you simply hand it back to the personal contract hire company.
Should you wish to end the agreement early you would normally pay up to 50% of outstanding rentals and handing the vehicle back, Make sure you check the T&C’s of the contract, Because you can sometimes ‘swap’ these contracts to someone else – assuming the personal contract hire company agrees!

So with the options of:

Flexible deposits
Contracts that can run 18 months to 60 months
Bolt on Maintenance & Service packages – these include all servicing (in accordance with manufactures guidelines),tyres, batteries, exhausts and basically anything that is not covered under the warranty
Annual Mileage limitations starting from just 5000 miles per year and increasing by 1000 mile increments upto 40000 per year
Payment’s are inclusive of VAT

You can see why personal contract hire is such an appealing method of funding and changing your vehicle on a regular basis.