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PCP vs PCH

So you're thinking about a personal lease - but do you understand the differences between Personal Contract Purchase (PCP) and Personal Contract Hire (PCH)?

Traditionally car leasing has only been available to businesses.  But nowadays, personal car leases are available to private individuals - And we're seeing a big increase in the number of private individuals wanting to benefit from the advantages that leasing a car provides.

There are two types of leasing packages aimed at private individuals; PCP and PCH.  The two packages are very similar, but there are two key differences.

1) Can you buy the car at the end of the lease?

PCP - Yes.  At the end of the lease, you can pay a balloon payment (which is agreed at the start of the contract) and keep the vehicle.  Or you can hand the car back and take out a lease on another new car.

PCH - No.  At the end of the lease, you simply hand the car back to the leasing company and take out a lease on another new car.

2) Is road tax included?

PCP - Yes - for the first year of your contract.  After that, you'll be responsible for taxing the vehicle.

PCH - Yes.  But the difference here is that you'll receive road tax for the full duration of the contract.  ie, if you lease a car for 3 years, you'll be sent road tax in the post automatically each year, for 3 years.

Other than that, the two packages are the same.  With both packages:

  • The depreciation risk is with the finance company - not you
  • You can budget accurately
  • Interest rates are fixed
  • You can add a maintenance package

Why would you choose PCP?

If you're not used to leasing, you may feel more comfortable with PCP - as you can buy the car at the end of the contract. 

You don't have to decide whether you want to keep the car, or buy it, until the end of your contract - keeping your options open.

PCP is designed to be halfway between the traditional method of buying a car and leasing one.

Why would you choose PCH

PCH is generally more popular than PCP - probably because there are more PCH deals available!

It's also really popular with ex-company car drivers - as they're mostly used to the concept of leasing.  They also know that they'll want to change their car in 2 or 3 years and don't need the option of being able to buy it.

Read more about the benefits of leasing.

Contact Vesource

Both PCP and PCH provide a simple way of driving a new car at a very reasonable cost.  If you'd like to know more, or would like a quote, please call us on 0845 052 5268 or ask for a leasing quote.

01993 894981 info@vesource.co.uk
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