Personal Contract Hire is similar to other contract hire agreements with the main difference being that it only applies a specific individual rather than a business. It is one of the most popular ways of leasing a car that is normally associated when a person talks about car leasing in general.
When you have a Personal Contract Hire agreement, you can drive a car for an agreed period of time. This duration is known as a ‘lease period’. Even though the car is actually in your possession, you do not own it.
You make monthly fixed rentals for the time period that you contract runs. Once the contract has completely finished, you return the car.
People find this agreement appealing as it means that they don’t have to worry about the eventual resale value of the actual car. As you don’t actually own the vehicle, once your contract is finished you can walk away without any extra obligations.
Benefits of Personal Leasing include:
Drive away in a new car with small upfront payments
You have the option of having all car maintenance and services included in the monthly price
Less financial risk
You don’t need to worry about selling your old car when looking for a new one
PCH is cheaper than ownership over the long term if you intend to replace them every few years
You can pick the exact colour of your vehicle
You can pick the exact trim of your vehicle
Possible to reduce Benefit In Kind (BIK) tax