Personal Contract Hire (PCH): What does it mean?

A long term rental agreement where you pay monthly for the use of the car but never own it.

Personal Contract Hire (PCH): The long answer

Personal Contract Hire (PCH) is a car financing option that is commonly used in the UK. It allows UK drivers to lease a car for a fixed period of time, typically between 2 to 4 years, without the need to purchase the vehicle outright.

With PCH, drivers pay a monthly fee to use the car, which is determined by factors such as the car's value, the length of the contract, and the agreed mileage limit. This fee covers the depreciation of the vehicle during the lease period, as well as any additional services such as maintenance and road tax.

One of the key advantages of PCH is that it offers drivers the opportunity to drive a new car without the commitment of owning it. At the end of the contract, the driver simply returns the car to the leasing company, without the hassle of selling or trading it in. This can be particularly appealing for those who prefer to drive the latest models or who do not want to deal with the potential depreciation and maintenance costs associated with car ownership.

It's important to note that with PCH, the driver does not have the option to purchase the car at the end of the contract, as would be the case with other financing options like Personal Contract Purchase (PCP). Additionally, drivers must adhere to the agreed mileage limit and keep the car in good condition, as excessive wear and tear or exceeding the mileage limit may result in additional charges.

Overall, Personal Contract Hire (PCH) provides UK drivers with a flexible and cost-effective way to enjoy driving a new car without the long-term commitment of ownership.