Often referred to as Contract Hire it is a method of acquiring the use of a vehicle without having to pay for all of it
It is called a lease because you never actually own the vehicle, you rent it for a given period, normally 2 3 or 4 years.
At the end of this period you give the vehicle back.
The money you pay to the Finance / Contract Hire Company is referred to as the “rental” and is normally charged monthly.
The “Rental” is calculated on the following basis.
Maintenance packages can be added to a personal lease, again these are calculated on the anticipated mileage the vehicle will travel.
A maintenance package should allow for,
Relief vehicle facility
This is another package that can be added to a personal lease (Personal Contract Hire PCH) and will provide for a temporary replacement vehicle due to various circumstances, eg breakdown accidents etc. again cost is dependent on the level of cover chosen.
Normally standard for the first 12 months of a vehicles life, it can be extended to cover the remaining period of a business lease / personal contract hire
The benefits of a Personal Lease ( Personal Contract Hire PCH )
With a lease you only pay for the asset while you are using it. So with a Personal Lease (Personal Contract Hire PCH ) you are only paying for the value the vehicle loses (its depreciation) whilst you are renting it.
You get to use the whole of the vehicle while only paying for part of it
This is cheaper that buying it all at once.
Because the finance / contract hire companies buy many thousands of vehicles, they buy better than you or I can, these savings are passed on to you.
You do not have the risk of the vehicle disposal at the end of its useful life.