Thinking about leasing a car but unsure how Personal Contract Hire (PCH) works? This guide explains everything you need to know about PCH – from how it works to what’s included – so you can make an informed decision with confidence.
This guide applies to all vehicle types available for personal leasing – including petrol, diesel, hybrid, and electric cars.
Personal Contract Hire (PCH) is a fixed-term car lease agreement designed for individuals. It allows you to drive a brand-new vehicle for a set monthly payment, without the long-term commitment of ownership.
At the end of the contract, you simply return the vehicle – there is no option to buy. It’s a hassle-free way to enjoy new cars every few years with predictable costs.
Here’s a step-by-step overview:
Brand-new vehicle
Road tax (VED) for the full term
UK mainland delivery
Manufacturer warranty
Optional servicing and maintenance packages
Optional breakdown cover
Speak to our team to customise your package based on your driving needs.
| Payment Type | Description |
|---|---|
| Initial Rental | Upfront payment – typically 3, 6, or 9 months of rentals |
| Monthly Payments | Fixed monthly cost for the duration of the lease |
| Excess Mileage | Charged if you exceed your agreed annual mileage limit |
| Damage Charges | May apply for damage beyond fair wear and tear |
| Early Termination | Penalties may apply if you end the contract early |
| Feature | PCH | PCP | HP |
|---|---|---|---|
| Vehicle Ownership | No | Optional (balloon payment) | Yes (after final payment) |
| Monthly Cost | Usually lowest | Moderate | Higher |
| End-of-Term Options | Return only | Return, pay balloon, or sell | Keep after final payment |
| Mileage & Condition Limits | Yes | Yes | Yes |
| Upfront Payment | 1–9 rentals | Deposit + fees | Deposit (typically 10%) |
PCH is ideal if you:
Want a brand-new car every few years
Prefer fixed monthly payments
Don’t want to worry about resale or depreciation
Don’t need to own the car
Can stay within your agreed mileage limit
If you want to own the vehicle or modify it, other finance types like PCP or HP may be better suited.
You lease a VW Golf for 36 months at 8,000 miles/year:
Initial rental: £750 (equivalent to 3 months)
Monthly rental: £250/month
Included: Road tax, delivery, warranty
End of contract: Return vehicle and start a new lease or walk away
Maintenance and servicing can be added for an additional monthly fee.
What is your total cost over the full term?
What happens if you exceed your mileage?
Is maintenance included or optional?
Are you likely to need early termination?
Are there charges for minor damage or wear?
Our team will walk you through all these details before you commit.
At Stable Vehicle Contracts, we offer hundreds of personal lease deals tailored to your needs. Whether you're looking for a petrol hatchback or a cutting-edge electric SUV, we’ve got options in stock and ready to go.
Ready to get a quote?
Click below or contact us to discuss your perfect lease.