What is PCH?
Personal Contract Hire (PCH) is a type of long-term rental where you effectively hire the car for a set period and pay a fixed monthly payment. At the end of the term the car just goes back to the leasing company. With PCH you do not have a contractual right to buy the car at the end of the agreement, so if you are looking for an agreement where you will own it at the end then PCH is not for you.
What are the Advantages to PCH?
The big advantage to PCH is you that you no longer need to worry about what to do with the car at the end of the agreement (as opposed to a PCP), you simply hand it back.
It is also possible to have maintenance built in so that you know for a fixed monthly payment all of your bills are covered.
You will also find that generally the monthly cost of a car on PCH is cheaper than PCP
No more Road Tax! Not strictly true but the monthly payment includes the cost of the road tax and the leasing company is responsible for re-taxing the car every year
Sounds Great! So what are the Downsides?
You will not own the car at the end or have an option to own it. Ok not necessarily a downside but if you are wanting to keep a car long term then it would be a problem!
All PCH agreements have an agreed mileage limit and if you go over you will be paying an excess mileage charge at the end.
You are entering into a contract to hire the vehicle for a set period, if you decide half way through you want to change there can be significant charges to end the agreement early
You will have to keep the car in good condition, if you return it at the end with damage then the leasing company will charge you to fix it.