Personal car leasing is a hugely popular way to upgrade and drive a car away today with more and more UK driver’s choosing to acquire their vehicle this way every year, more and more people are choosing to lease rather than buy their new vehicle. In the UK today, personal car leasing now accounts for over 2.0 million vehicles.
PCH is similar set up to car hire, in that you’re using a particular vehicle for an agreed length of time (usually between 2 – 5 years), for a set fee. You have flexibility of choice over your vehicle’s make, model, specifications, colour and trim.
Your contract is then specifically tailored to you in terms of annual mileage, length of contract and how you’d like payments structured.
The monthly rentals are calculated by taking the following into consideration:
- The cost of the vehicle
- The contract period
- Anticipated residual value of the vehicle (how much the vehicle is likely to be worth at the end of the contract)
- Mileage allowance (as chosen by you before the start of your contract)
- Any additional options, such as a maintenance contract
- You never technically own the vehicle – it remains the property of the finance company. However, this means you do not need to worry about the vehicle’s depreciating value
What happens at the end of the contract:
At the End of the contract, the vehicle is returned to the leasing provider, meaning you are free to hire or purchase another vehicle without any outstanding financial obligation.
If you have exceeded your agreed mileage, an excess mileage charge will be payable, worked out on a ‘pence per mile’ basis as set at the start of your contract.
When returning your vehicle, it will also be assessed according to the BVRLA Fair Wear and Tear guidelines. Any damage that falls outside of these guidelines may be subject to end-of-lease penalty charges. For more information on this, visit our Fair Wear and Tear guidelines page.
More and more individuals are looking at the option of personal car leasing instead of outright purchase as a much more cost-effective way of running a car.
Now more than ever, due to heavy car depreciation losses and unexpected repair costs associated with buying, personal car leasing can save a considerable amount of money over the lease period, with many these days seeing it as the cheapest way to drive a brand-new car. With car leasing, you’re simply paying the depreciation on the car, meaning your monthly outgoings are significantly lower compared to most other forms of finance.
