What is Personal Contract Hire? In this guide we explain everything worth knowing about Personal Contract Hire for a car.

The word ‘Hire’ tells you what Personal Contract Hire is all about. Basically, you’re renting a car for (typically) two or three years, with an agreed mileage limit of (typically) 10,000 miles a year.

There’s no option to buy the car at the end of the contract: you just hand the keys back to the finance provider. Effectively, your payments are covering the car’s depreciation.

While you’re running it, you’re responsible for its upkeep. On the plus side, the deposit is low, as are the fixed monthly repayments, and you can avoid the impact of repair bills by incorporating a maintenance element into the agreement.

Cars that hold their value well are a good PCH option, because the difference in their new and three-year-old values will be smaller, so you’ll repay a lower amount. Cars that plummet in value from new are a bad choice, because you’ll replay a much larger amount.

Is PCH suitable for me?

  • A PCH may be suitable for you if:
  • You don’t want to own a car, or suffer its depreciation.
  • You like being able to change cars frequently.
  • You like the idea of driving better cars than you could normally afford.
  • You don’t mind looking after cars.