Personal Contract Hire (PCH)

Personal Contract Hire (PCH)

personal contract hire

One of the most popular and common forms of transport in the world are cars. There are certain things that never get old such as freedom to drive the car whenever and wherever you want. Compared to buying a car directly, personal contract hire will make the use of vehicle more affordable and straightforward. Personal Contract Hire (PCH) is a long-term rental agreement for a vehicle.

PCH only applies to a specific individual instead of a business which is the main difference between PCH and other contract hires. While a person is talking about car leasing in general, the Personal contract hire is a popular way of leasing a car associated with it normally.

You can drive a car for an agreed period of time when you have a personal contract hire and this period is known as lease period. You won’t own the car even if the car is in your possession. The time period your contract runs can be used to make the monthly rentals and you will return the car once the contract is completely over. People don’t have to worry about the resale value of the actual car at the end of the agreement. You can walk away without any extra responsibility once your contract is finished because you actually don’t own the vehicle.


Personal contract hire – Benefits


The way to use the car becomes convenient which is one of the main points in taking out the PCH. Because of all the maintenance occurring later on in the future and large upfront cost, many people get turned off driving a new car. As you know that a loan for a car is more expensive but the monthly rental can be smaller in PCH as compared to getting a loan. Hence the advance cost of leasing a car is lower than buying it.

Fixed cost

The fixed cost is one of the main reasons for a person to choose the option of leasing a car. You will be able to set your budget properly without any additional cost out of nowhere because before the contract starts you will definitely get to know how much the monthly rentals will be.

Very fewer obligations

You will have very fewer obligations to take care of which is one of the greatest things about personal contract hire. At the end of the agreement, you are not selling the car because you don’t own it which completely avoids the extra work of putting the car on the market and let the buyers see the car and sell it. What you need to do is return the car and finish the agreement. Along with your PCH agreement, you also have the option of adding maintenance package due to which you don’t have to worry about any problem with the vehicle.

personal contract hire

Working of Personal Contract Hire?

At the end of a contract, you don’t need to worry about vehicle disposal, its warranty and depreciation as it is a long-term rental. To use the car for an agreed amount of mileage and time, you pay a fixed monthly rental. Your mileage will increase if you are an individual that has to travel a lot. This means a higher monthly rental due to the increased depreciation. Paying monthly rental is more accommodating as compared to buying a vehicle because monthly rentals you are paying is fixed. A lot of people cannot afford to have a new car on regular basis but they do prefer to have a new car. In such case personal contract hire is the best option. If a contract is finished, then on the same day you are able to start a new agreement.


Personal Contract Hire – Key Features

  • The monthly rentals are calculated by the contract period of the vehicle, the cost, a residual value of the vehicle, an additional option like maintenance contract and mileage allowance.
  • It will remain the property of the finance company as you will never technically own the vehicle. Hence you won’t need to worry about the depreciating value of the vehicle
  • It is the most common form (of private car leasing).
  • It has fixed monthly rentals that covers the vehicle rent and also has a maintenance option if chosen.


What Are the Main Benefits of PCH?

  • To meet your financial requirements and driving habits the terms are flexible.
  • The initial rental is very low.
  • To make the budget planning easier, the rentals for the whole package is fixed.
  • You don’t need to worry about its disposal or depreciation at the end of your agreement when you return it.
  • The vehicle that is not reachable in terms of its on-road cost you can lease it with PCH
  • Spreading the cost of monthly fees in PCH you are allowed to include the maintenance of the vehicle.

A car leasing is the best option for you, if you don’t want to own a vehicle or if you always wanted a car for a personal use.


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