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Help Me Choose
PCH v PCP

With over 2.5 million new vehicles registered every year in the UK its clear we like driving our shiny brand new cars away and for a number of years Personal Contract Purchase (PCP) has enabled drivers to have a new car every few years at low cost and with fixed payments.

So how do the options compare?


What is Personal Contract Purchase (PCP)?

A PCP deal is similar to a long term rental however you will need to pay a larger deposit and have options at the end of the contract as follows: 

  • Use the equity in the car towards a new car with the same dealer

  • Return the car to the dealership

  • Extend the contract to a total of 5 years

  • Pay the baloon payment and keep the car.

The mechanics of a PCP contract:

  • You do not own the vehicle at the start

  • You will have a credit check

  • Contracts generally last from 2 to 5 years 

  • You estimate your contract mileage at the start, exceeding this mileage reduces the estimated sales value of the vehicle

  • You will need to pay a deposit

  • You don't own the vehicle at the end of the contract and you have the 3 options outlined above

  • Over 85% of PCP customer DO NOT buy the car at the end of the deal


What is Personal Contract Hire (PCH)?

A PCH is a Personal Car Leasing deal is even more similar to a long term rental and at the end of the contract you have the following options: 

  • Return the car to the dealership

  • Extend the contract to a total of 5 years

The mechanics of a PCH contract:

  • You do not own the vehicle at the start

  • You will have a credit check

  • Contracts generally last from 2 to 5 years 

  • You estimate your contract mileage at the start, exceeding this mileage reduces the estimated sales value of the vehicle

  • You will need to an initial rental which is usually far smaller than a PCP deposit

  • You don't own the vehicle at the end of the contract

  • You are free to start a clean new lease on any vehicle with any new funder



Key Features of Each Product



Key FeaturesOutright PurchasePersonal Contract Purchase (PCP)Personal Contract Hire (PCH)Ownership from the startYesNoNoOption to own at the endYesYesNoLow Deposit Options   NoNoYesFixed Monthly Payments  No   YesYesIs there depreciation risk?YesNoNoMileage Caps    No - But higher mileage reduces cars valueYesYesReturn Conditions Apply (Damage etc)No - But damage reduces cars valueYesYesFinal Balloon PaymentNoYesNoEarly Termination ChargeNoYesYesIs Road Fund Licence included for the contractNoNoYesWho is it best for?Happy to take depreciation risk
Wants to keep a car more than 5 years
Happy to buy a used carWants fixed cost motoring
Wants a new car
Happy to pay a bigger deposit
Might want to buy car at the end of the contractWants fixed cost motoring
Wants a new car
Wants to pay a lower initial rental
Does not want to buy car at the end of the contract

So for the drivers who would like a new car and don't want the depreciation risk then its a straight choice between PCH and PCP.


SEE OUR NEW PERSONAL CAR LEASE SPECIAL OFFERS HERE

We compare Personal Contract Hire against a Personal Contract Purchase Deal Here

Personal Contract Hire Nissan Qashqai

And another great Personal Car Leasing Comparison Here:

Personal Contract Hire BMW X6

If you would like any further information about these or any other deals don't hesitate to call us on 0330 056 3331 to speak to one of our Customer Service Executives

Call us on 0330 056 3331