Important Message

Personal Contract Hire

There are few things that you purchase in life that will depreciate at the speed of a new car. A new vehicle especially we start losing value the moment that you drive away from the dealership forecourt.

Personal Contract Hire or Leasing is fast becoming top of people's list because of it's cost effectiveness and low hassle vehicle management.

What is Personal Contract Hire or Personal Leasing?

Car leasing was typical in business format, for company cars and big organisations to hire cars from new on a business contract hire basis. Personal car leasing and contract hire is now getting very popular in the UK and has bred from the US popularity in having a fixed monthly hire cost.

With a personal contract hire or “leasing” agreement as it is better known you take control of a car for a set contractual period, usually from 12 - 48 months maximum.

Though the car is in your possession you will not actually own it. Instead you will make fixed monthly repayments to a leasing company for the duration of the lease contract term.

When the lease contract expires you would simply return the vehicle to the leasing company, and take out a new lease with us.

So personal car leasing can be an attractive proposition. You never have to worry about resale values of the car, you never own it and can simply return it, walk away and start again!

What are the advantages of Personal Contract Hire?

Below we have outlined some of the advantages of personal leasing.

  • Fixed monthly cost. You can lease a new car at a fixed agreed monthly charge, you do not need to worry about interest charges and can be more tax efficient.
  • Cost Effective - Monthly instalments would be lower than if you were to purchase the car on a car finance agreement.
  • Low Initial payment - Typically 3 - 6 months of payments. ie 3 x £299 = £897
  • No Depreciation Concerns as you do not own the vehicle. You also don't need to worry about selling the car privately or lower part exchange dealer prices as you just simply hand the car back.
  • Option to have service & maintenance packages included so that you don't have to worry about the ongoing service and maintenance costs. It's all included in the one monthly payment!
  • Road Tax is included for the duration of your lease contract.
  • Drive a newer more expensive car for less. - With a personal contract hire deal you can budget for a more expensive car which would typically cost a lot more on conventional car finance or if you were to purchase outright.

There are a few disadvantages to personal contract hire to consider:

  • You must have fully comprehensive car insurance, third party is not an option as you will not own the car.
  • Mileage limitation based on what you disclose when you take out the contract.
  • No option to buy - Unlike a personal contract purchase agreement you do not have the ability to buy at the end of the term.
  • Usually committed to the contract for the full duration of the agreement, so if your situation changes you don't have the flexibility to part exchange.

If you run a business, you should look into business contract hire as there will be some benefits and tax incentives and advantages.

For any more information on personal contract hire and leasing please call us on 01782 904 719