This short video provides a simple explanation of Personal Contract Hire and how it works.
What is it?
The choice favoured by most people who would prefer to use a vehicle, rather than own one. You simply choose a vehicle for an agreed period up to 48 months in exchange for a fixed monthly rental which includes Road Fund Licence. There are no depreciation or vehicle disposal worries since you just return the vehicle at the end of the contract. Fixed price servicing and maintenance options are usually available with most contracts for an additional cost. Personal Contract Hire is the ultimate in hassle-free motoring.
How does it work?
- Your dealer will structure a Personal Contract Hire agreement to meet your needs based on the car, estimated annual mileage, the agreement duration and any additional services you require
- An initial rental equivalent to between 3 and 6 monthly rentals may be required after which you pay the agreed monthly rental until the end of the contract
- At the end of the contract you simply return the vehicle
Features and Benefits
- You pay a guaranteed fixed monthly rental for the duration of the contract – subject to tax and Road Fund Licence charges
- The contract is flexible, to meet the rental period and mileage that suits you
- Your monthly rental can also include servicing, maintenance and repair, for an additional cost
Other things you should know
- Your contract will be subject to a minimum period of rental, usually 24 months
- You will not own the vehicle and there is no option to purchase at the end of the contract
- If at the end of the contract the vehicle has covered more miles than agreed you will be required to pay a charge for excess mileage. In addition if you have not kept the vehicle in reasonable condition for its age and mileage you may be charged a refurbishment cost
- This type of finance is not available to corporate entities e.g. limited companies, PLCs or limited partnerships