Personal Contract Hire

Personal Contract Hire - Suitability explanation

Personal Contract Hire (PCH) is a fixed term and mileage-based agreement for the hire of a car for a period usually between 2 and 5 years. It is important that your agreement reflects your predicted annual mileage. The vehicle will not belong to you at any point in the agreement and so you cannot sell the vehicle. With a Personal Contract Hire agreement you will pay an initial rental followed by an agreed number of fixed monthly rentals for the specific period of hire you have chosen. The rentals include VAT at the prevailing rate for the specific period of hire you have chosen. At the end of the agreement the vehicle must be returned to the contract hire company.

Personal Contract Hire may not be suitable for you in certain circumstances. For example:

If you wish to own or buy the vehicle

If you might need to change your vehicle early (early settlement will incur charges

If you would like to shorten your period of hire by pre-paying

If you do not know what your predicted mileage will be

If you plan to export the vehicle or use abroad for extended periods

Benefits of Personal Contract Hire:

Low initial outlay and fixed monthly rentals

Choice of period of hire from 2 years and a total mileage up to 120,000 miles, with a maximum of 40,000 miles per annum

For peace of mind motoring optional maintenance plans are available, for an additional fixed monthly fee

Road Fund Licence is included for the duration of the agreement, though charges may apply reflecting future increases

The vehicle is simply returned at the end of agreement, removing concerns about disposal values and depreciation

Your contract will be regulated by the Consumer Credit Act 1974

Taking care of the vehicle:

You must ensure the vehicle is comprehensively insured at all times

You must pay any additional charges that you incur eg parking fine, congestion charge on time. If you don’t do this, the charge will be referred to the finance company who take payment from you for this and for an administration charge that they will make 

You must have the vehicle serviced and maintained by a main franchised dealer in accordance with the manufacturer’s requirements. If you include a maintenance package please note the funder may decline to settle any related charges if the total mileage on the agreement is exceeded. If you do not service and maintain the vehicle, the funder will make a charge when the vehicle is returned as this will affect its value

At the end of the agreement the finance company will assess the vehicle condition based on the standards set down in the BVRLA fair wear and tear guide, refurbishment charges may apply

If you exceed the total mileage charges will apply, please refer to your quotation

When the vehicle is returned, it must have all of the items that were with it when it was delivered eg all keys, locking wheelnuts, otherwise you will be charged for replacing these


Failure to make payments in full and on time may result in the contract being terminated and the vehicle repossesed. Only enter in to an agreement if you are comfortable with the financial commitment and terms.