Personal Contract Hire (PCH) Explained
Personal Contract Hire (PCH) is one of the most popular ways to lease a car in the UK. It allows drivers to enjoy a brand new vehicle for a fixed monthly payment without needing to purchase the car outright.
In this guide we explain what Personal Contract Hire is, how it works, what you pay for each month and what happens at the end of a PCH agreement.
How Personal Contract Hire Works
Step 1
Choose Your Car
Start by selecting a vehicle that suits your needs. You can browse the latest car leasing deals or explore the newest special lease offers.
Step 2
Set Your Contract
You choose your contract length, annual mileage allowance and whether you want to include a maintenance package. Most agreements run between 24 and 48 months.
Step 3
Initial Rental
At the start of the agreement you make an upfront payment known as the initial rental. This is typically equal to several monthly payments.
Step 4
Monthly Payments
Once your vehicle is delivered, you simply make fixed monthly payments for the duration of the lease agreement.
Step 5
Return the Car
At the end of the agreement the vehicle is returned to the finance company provided it is within the mileage allowance and fair wear and tear standards.
What is Included in a PCH Lease?
- The vehicle for the agreed lease period
- Manufacturer warranty
- Road tax for the duration of the lease
- Optional maintenance packages covering servicing and tyres
You can also explore vehicles ready for quicker delivery on our in stock car leasing deals page.
Personal Contract Hire vs PCP
| Feature | Personal Contract Hire (PCH) | PCP |
|---|---|---|
| Ownership | Car returned at end | Option to buy |
| Monthly payments | Usually lower | Can be higher |
| End of agreement | Return the vehicle | Return, trade in or buy |
| Best for | Drivers wanting a new car every few years | Drivers who may want ownership |
What Happens at the End of a PCH Agreement?
At the end of your Personal Contract Hire agreement, the vehicle is returned to the finance company. The car will be inspected to confirm it meets fair wear and tear standards and is within the agreed mileage allowance.
Many drivers simply move into a new lease and upgrade to a newer model at this point.
Advantages of Personal Contract Hire
- Lower monthly payments compared with buying outright
- Drive a brand new vehicle every few years
- No resale value risk
- Predictable fixed monthly payments
- Access to the latest technology and safety features
Browse the Latest Personal Lease Deals
Ready to find your next car? Explore our latest car leasing deals or view our newest special lease offers.
Browse Car Leasing DealsFrequently Asked Questions About Personal Contract Hire
Personal Contract Hire (PCH) is a type of car leasing that allows you to drive a brand new vehicle for a fixed monthly payment over an agreed period, usually between two and four years. Instead of buying the car outright, you simply pay to use it for the duration of the contract.
At the end of the lease, the vehicle is returned to the finance company as long as it is within the agreed mileage allowance and meets fair wear and tear guidelines. You can then choose a new vehicle from the latest car leasing deals.
Personal Contract Hire works by spreading the cost of driving a new vehicle over a fixed contract period. You select a vehicle, agree a contract length and mileage allowance, then pay an initial rental followed by fixed monthly payments.
These payments cover the vehicle’s depreciation during the lease rather than the full purchase price, which often makes leasing more affordable than buying a car outright.
No. With Personal Contract Hire you do not own the vehicle. The car remains the property of the finance company throughout the agreement.
Once the contract ends, the vehicle is returned and you are free to choose another lease vehicle if you wish.
A Personal Contract Hire agreement normally includes the vehicle itself, the manufacturer warranty and road tax for the duration of the contract. Some agreements also offer optional maintenance packages that cover servicing, tyres and MOTs.
If you are looking for vehicles available sooner, you can also browse our in stock car leasing deals.
At the end of a Personal Contract Hire agreement, the vehicle is returned to the finance company. The car will be inspected to ensure it meets fair wear and tear standards and is within the agreed mileage allowance.
Many drivers then choose to start a new lease and upgrade to a newer vehicle using the latest special lease offers.
In many cases Personal Contract Hire can be cheaper than buying a vehicle outright or financing it with traditional car finance. This is because your monthly payments only cover the depreciation of the vehicle during the lease term.
Leasing also allows drivers to change vehicles more frequently without worrying about resale value.
Yes, it is sometimes possible to end a Personal Contract Hire agreement early, but early termination charges will usually apply. The amount depends on how much of the contract remains and the finance provider's terms.
It is always important to choose a lease term and mileage allowance that suit your driving needs before signing the agreement.
Yes. Personal Contract Hire is widely available for electric vehicles as well as petrol, diesel and hybrid cars. Leasing is one of the most popular ways to drive an electric vehicle because it offers predictable monthly payments and avoids concerns about future resale values.
You can compare the latest electric car leasing deals to see the newest EV models available.