Personal Contract Hire
A personal contract hire (PCH) is a form of car finance that essentially involves leasing a car.
Benefits of personal contract hire include:
- Fixed monthly repayments
- The deposit and term can be adjusted to find the budget that suits you
- Maintenance of the car can be included in the monthly fees
- As you will never own the car, you do not have to worry about its depreciating value
What is Personal Contract Hire?
Personal contract hire could be a great option for you if you’re not interested in owning the car outright yourself. It gives great flexibility in the types of car you can drive.
It's not quite the same as hiring a car but works in a similar way; you agree to pay to use the car for a set period, then return the car. End of story.
Essentially, you pay for the cost of the depreciation of the car, so if you select a model that won’t plummet in value you can get yourself a great deal with low monthly repayments.
Personal Contract Hire, like PCP, comes with a mileage limit which is usually 10,000 miles a year. If you go over this you’ll be charged. Similarly, you need to make sure the car is returned in good condition to avoid any additional fees.
Leasing is often used by businesses because of the tax benefits - although personal leasing is becoming more popular. It's a great way of using a car for a year or more at a far lower price than PCP or HP. The disadvantage is if you fall in love with the car, there is no option to own it at the end.
If you want to find out the best personal contract hire deal for you, try our car finance calculator, but if you’re ready to take the plunge and apply for car finance today then visit our apply page. If you want to know more about Personal Contract Hire though, read our quick guide below.
PCH Car Deals
If you’re looking for PCH deals on used cars, look no further than ChooseMyCar. As experts in car finance, we can help you get the best PCH deals. As PCH is such a flexible way to get a car on finance, there is a host of great PCH used car deals to be had. As costs can be kept lower for PCH deals, due to the nature of the type of finance, it can offer the opportunity to get behind the wheel of cars from premium manufacturers like Audi, Mercedes-Benz and BMW as well as make manufacturers Kia and Skoda even more affordable.
Used Audi deals for cars like the Audi A2 or the much loved Audi A3 model are obtainable through ChooseMyCar. We also have a selection of used Mercedes deals available, like the C-Class. If you want to get driving a car like the BMW 3-series then check our used BMW deals too.
It’s not just the luxury car market that PCH deals are great for either, they make other brands more accessible too. At ChooseMyCar you’ll find used PCH Kia deals for models like the Sportage. If you’re after a used Skoda, then we’ve got used Skoda deals available on the Sportage or the Fabia or the Octavia.
Is Personal Contract Hire (PCH) right for me?
Personal Contract Hire: Things to Consider
- You will never own the car outright, so if you fall in love with it you’ll still have to give
- The monthly repayments depend on how the car is expected to depreciate so pick
your model wisely
- The car will be subject to a mileage allowance and must be returned in a good
condition or you will face charges
- While a bad credit score may affect your ability to apply for personal contract hire it often isn’t a huge issue. It is down to you to make sure you meet the monthly repayments, even if you pass the credit check. We have further information on car finance for people with bad credit scores.
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Frequently Asked Questions
As you are only renting the car, the costs can be relatively low. However it’s worth keeping an eye on any mileage allowance or maintenance costs as you may be charged for excessive mileage or anything deemed to be more than standard wear & tear.
A deposit for PCH will generally be equal to 3, 6, 9 or 12 months of the instalments you agree.
The more you can afford to pay at the beginning the lower your monthly repayments. While you don’t need to worry about saving money for a balloon payment, you do need to consider keeping savings for any excess mileage, maintenance or your next deposit.
Contracts for PCH generally last 12, 24, 36 or 48 months. There are other contract lengths however and it’s worth working out what the cost of the car will be at the end of the agreement, and whether a longer agreement is worthwhile.
The lender is always the legal owner of the car on PCH as you are essentially leasing it. There is no option at the end to buy the car outright.