Personal Contract Hire - PCH

  1. A Hiring Agreement where the vehicle remains the property of the Finance Company
  2. The vehicle is disposed of by the Finance Company at the end of the contract
  3. The contract is set for a period usually between 2 & 4 years
  4. The contract is for a set mileage
  5. The customer payes a fixed monthly rental that will always include:
    • Cost of vehicle funding
    • Cost of vehicle depreciation
    • Road Fund License
  6. For an additional Rental the customer can include the following options:
    • All Maintenance, Service, Repairs, Tyres and Batteries*
    • Relief Vehicle provision
    • Recovery service
    • *Accidental damage, driver abuse and glass breakages are normally excluded

Advantages

  1. Fixed cost motoring: The Customer only has to bear the direct costs for fuel and vehicle insurance, plus Excess Mileage charges if the vehicle exceeds the Terminal Mileage figure
  2. Reduced Administration
  3. No responsibility for vehicle disposal
  4. Low initial outlay
  5. Low monthly outlay
  6. Finance charged on VAT exclusive price of new and qualifying cars

Disadvantages

  1. No equity on the vehicle at the end of the contract
  2. VAT on rentals, only 50% of which is reclaimable
  3. Vehicles do not appear on the balance sheet