Personal Contract Hire​ (PCH)

Drivers who would prefer to rent a vehicle could benefit from a Personal Contract Hire (PCH) plan. It suits long-term renters, and gives you the freedom to change cars on a more regular basis.

How does PCH work?

The finance amount, less the deposit, is borrowed on your behalf. At the outset, you also decide on a mileage limit. In effect, the deposit is equivalent to several months' rent on the car in advance. The lender then leases the vehicle to you, with regular monthly repayments to be made.

As you are only leasing, payments on PCH could be lower than on a Hire Purchase plan.​

What do I do at the end?

The car is returned at the end of the agreement – there is never an option to purchase. You also have no further obligations, and can simply hand the keys back to the dealer.

All vehicles must be returned in good condition, and within the mileage limit set out at the start of the term. Going over your limit could incur charges, and this is often calculated per mile. In addition, if there is significant damage to the car you may have to have this repaired yourself.

Once the plan is over, you can potentially take out another PCH agreement on a different make and model of car. This flexibility is ideal for longer leasing and to avoid the eventual depreciation every vehicle is subject to.

Benefits of Personal Contract Hire

Drivers who opt for a personal contract hire can dispense with many of the onerous bureaucratic obligations which come with more permanent arrangements, such as Hire Purchase or Personal Contract Purchase.

Such concerns as resale value or the expiration of warranties are non-existent with PCH, and all the usual costs of ownership (e.g. Vehicle Excise Duty) are absorbed into the agreed monthly repayments. The very low deposit and the flexibility of the rental agreement enable you to switch cars quickly, and to drive a more expensive car than you might otherwise be able to afford.

Can I settle a Personal Contract Hire agreement early?

Your finance provider may agree to this. It is unlikely that paying early will save you money, as the full leasing amount will still be owed. If you are having trouble meeting the repayments, talking with the finance provider could result in beneficial adjustments to your agreement terms.

Get in touch

A wide range of new cars and competitive Hire Purchase agreements can be selected from all Johnsons Cars dealerships. In the south of England, the West Midlands and Merseyside, we are your local, trusted dealer for new and Approved Used vehicles.

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