personal contract hire
If you normally buy your cars with cash, a bank loan, or through a traditional Hire Purchase scheme, you may find Personal Contract Hire a far more cost-effective option.
Specifically designed for the private motorist. This form of funding allows you to run your own car on a similar basis as a company car without having to pay tax on the benefit. Unlike many company car schemes you are not restricted in your choice of vehicle. PCH allows you to use a car for a set period of time at a fixed monthly price.
Under current VAT legislation, all our lenders are able to reclaim the VAT on your new or ‘VAT qualifying’ used vehicle (less than 3 months old). This saving is then passed on to you in the form of lower monthly rentals that are fixed throughout the agreement.
Not only does Personal Contract Hire allow you to run a new vehicle for an inclusive monthly rental but it also releases valuable capital from your current vehicle or your next potential purchase. Personal Contract Hire means you can afford an even better vehicle than perhaps you initially thought.
Personal Contract Hire can offer a package to include routine servicing and maintenance costs for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network & at a local dealer of your choice. Maintenance packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear**.
At the end of your agreement our team will arrange to collect your vehicle free of charge from your home or office address. Not only does this avoid time-consuming disposal issues and any worries over depreciation of the vehicle* but allows you to make the best use of your valuable time. Annual Road Fund Licence is included in the monthly rental for the duration of the contract.
The Payment Options
In the leasing industry the “normal” payment profile is 3 initial rentals in advance. A higher initial payment will bring the monthly payment down and a lower initial payment will higher the monthly payment.
Examples of initial payment.
If a customer takes out a lease on a BMW based on a 3+35 payment profile at £350 including vat per month the total payment at the end of the lease will be £13,300 (38 x £350). Some different initial payment profiles based on this example are as follows:
- 3 Initial payments
- Initial payment is 3 x £350 = £1050
- Monthly payment is 35 x £350
- Total payment is 38 (3+35) x £350 = £13,300
- Initial payment of £2,000 + vat – for customers who want a lower monthly payment
- Initial payment is £2,000
- Monthly payment is £322.86 (£13,300 – £2,000 / 35)
- Total payment is £2000 + (35 x £322.86) = £13,300
- 1 initial payment – for customers who want to have a lower initial rental
- Initial payment is 1 x £350 = £350
- Monthly payment is £370.00 (£13,300 – £350 / 35)
- Total payment is £350 + (36 x £370) = £13,300
Please note that the above examples are just for illustration purposes and to be used as a guideline – please obtain a written quote for all different payment profiles that you require.
Is PCH subject to VAT?
Yes, VAT is charged and included within all the payments but is un-claimable by the individual.
Key Benefits of Personal Contract Hire
*Excess mileage and vehicle damage charges other than fair wear and tear may be payable. **Subject to Terms & Conditions