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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.

  • The interest costs relevant to the amount of money borrowed (The cost of the vehicle)
  • The depreciation the vehicle suffers during the contract period. Clearly the more miles you travel the more the vehicle depreciates
  • Road Fund Licence

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,

  • All scheduled servicing,
  • All remedial repair work.
  • All tyres, batteries and exhausts (including catalytic converters)

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.

Breakdown Cover

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.