What is personal car leasing?
Personal car leasing, otherwise known as personal contract hire or PCH, is a low-cost way to drive the car you want without the worry of ownership, depreciation or resale values. You make fixed monthly payments; then at the end of your agreement, you simply hand the car back and walk away.
You can drive a better car for less through personal car leasing.
1 Personal Contract Hire (PCH)
Instead of having to pay for the entire car or van upfront, you make fixed monthly payments over a pre-agreed term, usually between 12 and 48 months.
Then, when your agreement ends, you simply return the vehicle to your finance provider and walk away. You’re then free to start a new contract if you wish.
With a personal contract hire agreement, you never own the vehicle. Instead, your monthly payments cover its depreciation during your tenure.
That means your monthly payments are usually significantly lower than some other types of finance, such as hire purchase.
A personal contract hire agreement’s payments are calculated by using several criteria.
- The value of your vehicle at the start of the agreement
- How much deposit you wish to make
- Your expected annual mileage
- How long the agreement is going to last
- The interest applied by your finance supplier
When you hand the vehicle back at the end of your lease, as long as you’ve kept to the agreed mileage and there’s no damage to the car or van outside of fair wear and tear, you’ll face no extra charges.
A personal contract hire agreement is perfect if you never want to own the vehicle. And because the contract is shorter than some other types of finance, it also means you get to change your car or van more frequently.
With a lease, you can also add a maintenance package to give you complete peace of mind, and road tax and breakdown cover are usually included.