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Personal Contract Hire (PCH) for Private Individuals

Personal Contract Hire (PCH) for Private Individuals

Individual vehicle hire contracts

This funding method is basically contract hire for the private individual. It is known by most individuals as “leasing a car”.

You the customer, whilst not owning the vehicle, benefits from our buying power to drive down the cost of the monthly rental.

Personal Contract Hire can offer a cheaper alternative to “Personal Contract Purchase” where the leasing company is benefiting from their purchasing terms with the manufacturer or chosen supplier.

Key customer benefits:

  • Leasing4u’s buying power drives down monthly rental costs
  • Fixed monthly rental that can include additional services, such as maintenance – no cashflow fluctuations
  • None of the depreciation risks associated with ownership
  • The convenience of a full maintenance service, at a fixed monthly cost, is optional
  • Road Fund Licence is provided for the full term of the contract.

What is PCH (Personal Contract Hire)?

A Personal Contract Hire (PCH) agreement is an operating lease product offered through a Leasing Company to non-business customer’s under which the Leasing Company accepts responsibility at a fixed cost for depreciation, funding costs, and administration and (if requested) the provision of maintenance.

Under PCH a vehicle continue to be owned by the Leasing Company yet is hired to you for a set period of time and at a fixed monthly rate.

How does it work?

The monthly rental charged is calculated based upon the cost of the vehicle, the contract period and the anticipated resale value. It is also takes into consideration the predicted mileage, service and maintenance costs (if requested in the contract).

Under a Personal Contract Hire (PCH) agreement the Leasing Company retains ownership of the vehicle at all times and therefore continues to absorb the subsequent risks such as unforeseen running costs and uncertain resale values.

What are the key features?

(a) Excess Mileage Where an agreed mileage is exceeded during the contract hire period an excess mileage charge is payable. This is calculated on ‘pence per mile’ set at the start of the contract. Excess mileage is calculated at the end of the contract and invoiced to you.

(b) Rescheduling (subject to approval) The original contract for a vehicle may be revised for an increase of mileage, term or addition of optional services after 12 months of the contract has elapsed.

Where there is a change to mileage or term of a vehicle the recalculation is made from the start date of the contract resulting in a revised rental.

What are the financial benefits?

As this is a personal contract offered for non-business use there are no specific VAT or Corporation tax advantages on this product.

What happens at the end on the Contract?

The Leasing Company offers a number of different options at the end of the contract.

Purchase – We can arrange a purchase price quote on your behalf, as long as the party buying the vehicle is not the Hirer or their family members. The vehicle is unable to be purchased directly by the person whose name is in on the contractual agreement. This is subject to the funders rules, not all funders will offer a purchase price at the end of the lease.

Hand the vehicle back to the Leasing Company - no hassle in disposing of the vehicle. (Regulated & Un-Regulated) just contact us and arrange collection of the vehicle (3 working days notice is required minimum). We will give you a copy of the hand over appraisal form and ensure that excess mileage is checked.

Any damage on the vehicle or missing service history, keys etc will be charged as detailed in the Leasing Companies ‘Fair Wear & Tear Guides’ which can be supplied on request.

Formal Extension – you may request an extension (depending on the Leasing Company) to your existing contract for 6 or 12 months.

Informal Extension – You may continue to run the vehicle on for a limited period (depending on the Leasing Company). However, it is important to note that in this instance we have the right to request a termination of the hire and if maintenance is included we have the right to remove this at any time.