Personal Contract Hire

Personal Contract Hire – or PCH – is a type of lease where fixed monthly payments are made for an agreed period of time. The deposit is usually more substantial compared to a PCP agreement.

Personal Contract Hire Explained

Personal Contract Hire starts by agreeing your expected mileage, which will have an effect on how much you pay each month. You’ll also need to pay an initial rental, which could be as little as one monthly payment.

You can then begin making your monthly rental payments, which typically stretch over a term lasting anywhere between 2 and 4 years.

At the end of your agreement, the finance company will collect your car and give it a thorough check for wear and tear, as well as confirming your mileage. If you’ve gone over the expected mileage or there’s any damage to the car, you may have to pay additional charges.

Personal Contract Hire – Key Considerations

One advantage of many Personal Contract Hire agreements is that they cover servicing and maintenance, and possibly even replacement tyres, so the only things you need to pay for are insurance and fuel. Sometimes you’ll find servicing and maintenance costs are built into your monthly rentals, which means your motoring costs are fixed and manageable. In addition, PCH gives you the chance to change your car every few years, and you don’t need to worry about depreciation or selling it on at the end of your contract.

However, when you take out a Personal Contract Hire plan, you never actually own the vehicle (i.e. you will not be the registered keeper of the car). Plus, ending your contract early can be expensive as you’re usually committed to paying all or most of your monthly payments, even if your circumstances change.