Personal Contract Hire

Personal Contract Hire is a form of car leasing, or long-term rental, where you put down an upfront cost and pay monthly to lease a car and hand it back at the end. You’ll never own the car with PCH, instead, you’re renting it.

What does PCH stand for?

PCH stands for:

• Personal: the agreement is for private drivers, not businesses
• Contract: the leasing contract is typically 24 - 60 months
• Hire: you’re leasing the car & don’t own it at the end

PCH is a very simple process which is essentially a long-term car rental. You put down an initial payment (not a deposit) and then pay monthly rentals for the duration of your agreement.

Your agreement will last anywhere between 24 to 60 months and you’ll also have a mileage limit for the duration of your agreement.

1. You put down an initial rental payment (usually around three months’ rentals upfront)
2. You pay a set monthly fee for the duration of your agreement (usually 24-60 months)
3. You hand the car back at the end of the agreement and that’s it
   
   1. You may have to pay additional fees if you exceed your mileage allowance
4. From here you can carry on with another PCH agreement with the latest version of the same car, go for a completely new model or end the lease.

Getting a car through PCH is ideal if you know you don’t want to keep the car after the term, and you want to drive the latest vehicles. It’s also perfect if you want to pay less overall, as PCH deals typically cost less than PCP finance when comparing the full terms.

Benefits of Personal Contract Hire

There are plenty of benefits when it comes to Personal Contract Hire. Read below to find out if PCH is the right way to fund your car.

There are a few main points to consider when it comes to PCH deals. This includes:

The end of PCH is pretty simple. You hand the car back and the contract ends - that’s it. As long as you have kept within your mileage limit and returned your car in good condition, you won’t have anything extra to pay.

If you have breached your mileage allowance, you may have to pay per mile. And if you’ve damaged the car or kept it in bad condition, you may be charged for repairs.

Once everything is settled, you’re free to get your next vehicle on PCH. You can choose from a roster of the latest vehicles or walk away and end it there.

You can typically cancel a Personal Contract Hire agreement but you may still have to pay the remaining amount of rentals (depending on how far into the contract you are.) This is known as a PCH early termination. This may not be available on all leases so make sure to read your contract.

If you can no longer afford your lease, cancelling may not be the best option. Instead get in touch with the finance provider to see if you can increase the length of your agreement, which would then reduce your monthly payments.

However, there is a 14-day cooling-off period at the start of your contract where you can cancel without charge.

The cooling-off period for Personal Contract Hire agreements is typically a minimum of 14 days from entering the contract.

If you choose to cancel your PCH deal during the cooling-off period you won’t be charged. This usually applies to any sales made online, over the phone, by mail or anywhere not on the company’s premises. So if you go into the premises and sign the contract, you may not have the right to a cooling-off period.

You are typically refunded all payments including the processing fee. To cancel during the cooling-off period, just get in touch with your finance provider.

Does personal contract hire include insurance? Not usually, no. So you will be liable for ensuring you are fully insured on your PCH car. You will also most likely need to purchase fully comprehensive cover for your car too.

Whilst not necessary, it’s worth getting GAP insurance on your PCH car. GAP (Guaranteed Asset Protection) insurance covers you in the event of your lease car being written off or stolen so you won’t have to pay anything extra as your insurer covers the costs. Without GAP, you would have to pay for the remaining costs if your vehicle is written off or stolen.

Here at Pentagon, we have an exciting range of Personal Contract Hire deals across a range of makes and models. Our accredited panel of lenders offer:

• Fixed monthly rentals
• Locked-in interest rates
• Low and no deposit offers
• Convenient application

Have a look through our latest deals or book a test drive at your local Pentagon Group dealership. We have a team of fully trained SAF-accredited specialists here to help you get the keys to your dream car in #branchCountyNewCar#.