Understanding Personal Contract Hire

• Personal Contract Hire (PCH) involves leasing a car for an agreed period of time at a fixed monthly cost.
• For private individuals that means cost-effective, flexible motoring, which is cheaper than buying a car.
• All servicing and maintenance can be provided – giving you peace-of-mind that everything is running smoothly with no unpredictable costs.
• It is a form of vehicle finance where the vehicle remains the property of the finance company, with the vehicle effectively hired out to an individual.
• At the end of your term, you simply return your vehicle to the leasing company and replace it with another one.
• The vehicle should be returned to the leasing company in a condition that meets the BVRLA ‘Fair Wear and Tear’ guidelines, otherwise charges may be incurred.

ADVANTAGES OF PERSONAL CONTRACT HIRE

• You choose the model of car that you want. All you do is pay one fixed monthly fee, keeping your costs low and predictable.
• Hassle-free motoring.
• Flexible payment structure – from 24 to 60 months.
• Running costs e.g Maintenance and servicing can be included for easier budgeting. No risk of unexpected vehicle depreciation.
• The vehicle is not subject to ‘Benefit in Kind’ tax.
• PCH gives you fixed cost motoring.

THINGS TO REMEMBER

• You do not have the option to own the car.
• All rentals include VAT. However, the user is unable to reclaim the VAT element or percentage thereof.
• Excess mileage charges may apply if you have exceeded the contracted mileage when you return the car.
• It can be expensive to terminate the contract early.
• Damage - standard wear and tear is allowed, the vehicle should be returned to the leasing company in a condition that meets the BVRLA ‘Fair Wear and Tear’ guidelines, otherwise charges may be incurred.