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Personal Contract Hire

Personal Contract Hire or PCH is an increasingly popular finance option

If you’d like to drive away in a new car, but don’t want the hassle of ownership, Personal Contract Hire could be just what you’re after.

What is Personal Contract Hire (PCH)?

PCH allows you to drive away in a new car but without the added responsibilities that come with owning it. With Personal Contract Hire you pay an initial rental fee and then fixed monthly payments for the agreed term. At the end of the contract, you can simply hand the car back without paying a penny more, subject to mileage and fair wear and tear.

How does Personal Contract Hire work?

It all 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.

What are the pros and cons of Personal Contract Hire agreements?

Servicing and maintenance
Many PCH agreements cover servicing and maintenance, and possibly even replacement tyres, so the only things you need to pay for are insurance and fuel.

That new car feeling
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.

Fixed monthly costs
Sometimes you’ll find servicing and maintenance costs are built into your monthly rentals, which means your motoring costs are fixed and manageable.

Something to bear in mind
When you take out a Personal Contract Hire plan, you never actually own the vehicle. 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.

What is the difference between PCH and PCP?

PCH and the similarly named PCP are often confused, but the difference bewteen them is quite simple, PCH is a hire agreement and you don't get the option of buying the car at the end of the agreement. With a PCP the opposite is true, it is a purchase plan so you get the option to buy at the end of the agreement.

How do I arrange a Personal Contract Hire agreement?

PCH agreements can be arranged at your local dealership.


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