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Personal Car Leasing: How Does It Work?

When it comes to the world of personal car leasing it can be quite confusing, especially with all the jargon. So, lets’ take a closer look at how it all works and lay it out for you in simple terms.



Personal contract hire (PCH) is one of the most popular ways to get a brand-new car. A PCH is an agreement you enter into to rent the car for a period of between 24 and 48 months. Car lease deals UK are entered into when you put down a deposit (usually up to 12 months of the monthly payment upfront) and then pay monthly payments for the remaining period of time. At the end of the lease, you simply hand back the car and start a new PCH with a new vehicle.

On the other hand, PCP is similar in that you pay an upfront fee for the length of the contract and then you have the option to make a balloon payment at the end of it if you want to keep the car, or you can opt-out and just hand it back.


Key features of PCH

Personal contract hire is fast becoming the most common form of private car leasing, because it gives you the option of paying a fixed monthly rental fee plus any maintenance option if chosen.

The monthly rental amounts are calculated by taking the following into consideration:

  • The retail cost of the vehicle
  • The contract period, which is usually between 24 and 48 months
  • The anticipated cost of the vehicle at the end of the contract
  • Mileage allowance
  • Any additional options, such as a maintenance contract

It is important to bear in mind that you never actually own the vehicle, it remains the property of the lease company. However, this can work in your favour as you don’t have to worry about the cost of the vehicle depreciating.

Important things to remember:

  • If you want to terminate the contract early, it can work out expensive
  • If you exceed the agreed mileage, then you will be charged on a per mile basis
  • If the lease is for more than 3 years, then you may have to get the car MOT’d
  • When you return the car it must be in a well maintained condition or you will be charged
  • A PCH vehicle must have fully comprehensive insurance which can be expensive

Start you new car leasing UK deal today with Amber Vehicle Solutions.

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Posted on 16th August 2019 at 8:59 AM

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