Personal Contract Hire

Personal Contract Hire (PCH) can be a convenient solution for drivers who want to hire a car but not own it. It’s the form of contract hire that applies to individuals rather than businesses.

Monthly payments on PCH are based on the Guaranteed Minimum Future Value (GMFV) of the vehicle, which is deducted from the retail cost. You then pay this amount in regular instalments.

To ensure that the GMFV is accurate, the leasing company will typically set an annual mileage limit for you. Fair wear and tear also applies, so taking good care of your hire car and having it well maintained is vital to avoid additional charges.

The pros and cons

As PCH is not the same as purchasing a car outright, you have more options than may otherwise be the case. You can enjoy a brand new car – and if you sign up for another PCH at the end of the term, you can do so again.

PCH usually includes your road tax (Vehicle Excise Duty). The monthly cost is fixed for the entire term, so you are not affected by changes in interest rates.

When the agreement finishes, you simply hand the vehicle back. You avoid any depreciation in the value of the car during the PCH term, and you don’t have to worry about finding a buyer.

A point to remember is that, throughout the whole agreement, the vehicle is always the property of the leasing company. There is no option to buy the car at any point, and as it is not legally yours you must take out comprehensive vehicle insurance.

Find out if PCH is the right type of car finance for you. Speak with one of the experts at any of our Eden Motors dealerships across the UK.