How Does Personal Contract Hire Work?

Mercedes Car - Personal Contract Hire

Contract Hire or PCH as it is often referred to is the agreement between a car leasing company and an individual. As with any contract, each party must comply with the agreement which usually outlines a fixed monthly monetary amount in exchange for the use of a lease vehicle with set mileage and usage permissions.


Monthly payments on PCH generally tend to be lower than those of a bank loan or PCP (Personal Contract Purchase) however, at the end of the fixed term, the car has to be returned to the lease company. There is often the requirement with a PCH to put down 3 months’ rental in advance and there won’t be the chance to buy the car at the end of the term.


To qualify for Personal Contract Hire, you’ll need to be aged 18 or above, hold a full UK driving licence and have a good credit rating. Included in a PCH Plan you should expect your monthly payments to include car tax for the duration on the contract, a personalised mileage allowance and terms as well as the option of a comprehensive vehicle management package including servicing and maintenance.


So what are the benefits of a PCH? Well, you can expect motoring without having to do the legwork, you’re likely to be paying much less a month than if you were to take out a bank loan or PCP to purchase a car, maintenance and servicing can be included, your car won’t be subject to Benefit in Kind tax, fixed cost motoring as well as no unexpected depreciation on the vehicle.


All this sounds like a great idea to us! If it sounds like a great deal to you too, why not have a chat with us about it? Give the Cocoon Vehicles team a call on 01332 290173 or complete the form below and we’ll be in touch as soon as we can.