It is incredibly important that you understand the finance options which CarLease UK offer before progressing any further with your enquiry. Depending on your individual circumstances, we may be able to offer a financial product which would be more beneficial to you.

Set out below are highlights of the financial products we can offer, including some of the advantages and disadvantages. If you have any specific queries, please do contact one of our account managers on 01942 608606 or email us at enquiries@carlease.uk.com

Personal Contract Hire Option

Car leasing is a generic term which is commonly used to describe a financial product known as Contract Hire (please be aware that “leasing” can sometimes describe other financial products so it is very important that you qualify when conducting any research). While contract hire was originally designed to benefit businesses, individuals too can now utilise contract hire as a means of operating their vehicles.

Personal Contract Hire (sometimes called “PCH”) is suitable for those individuals who wish to use a car for a designated period of time (24, 36, 48 or 60 months) and based on a predetermined amount of annual mileage (ranging from 5,000 to 50,000 miles per annum). However, it is crucial to note that PCH is not an ownership product.

Advantages of Personal Contract Hire

  • Fixed period of car usership ranging from 24 to 60 months – you decide how long you need to use the car;
  • Low initial rental options available (subject to lender’s acceptance) – the initial rental is not a refundable deposit. The initial rental forms part of the finance arrangement, so you can decide how to structure this based on your circumstances i.e. small initial rental/higher monthly rentals or bigger initial rental/smaller monthly rentals;
  • Option to include a maintenance package – our advertised rates do not include However, you can add this to your contract in order to cover the cost of all routing servicing, maintenance and tyres;
  • An individual can benefit from competitive “fleet” discount structures; and
  • No depreciation concerns with the vehicle.

Disadvantages of Personal Contract Hire

  • This is not suitable for those individuals who wish to own a vehicle. For the avoidance of doubt, contract hire is not an ownership product;
  • Vat is not reclaimable on a PCH contract;
  • You will be charged for damage that is not acceptable under the BVRLA's Fair Wear and Tear Guidelines (available upon request); and
  • You will be charged an excess mileage rate for any mileage above your contracted rate (set a pre-agreed pence per mile).

Personal Contract Purchase Option

Personal Contract Purchase (PCP) is a financial product which can often be confused with Personal Contract Hire (PCH). Some individuals who are “leasing” their vehicle may actually be utilising a PCP contract. PCP is suitable for those individuals who do want an ownership based financial product.

A PCP arrangement presents a flexible means of running a car for a pre-determined time (a minimum 24 month term) on an agreed annual mileage (ranging from 5,000 to 50,000 miles) while having the opportunity to purchase the car for an agreed sum at the cessation of the contract. This final sum is described as a guaranteed future value or balloon payment. Alternatively, you can hand the vehicle back to the funder or seek to sell this in conjunction with a part exchange arrangement.

Advantages of Personal Contract Purchase

  • Flexible range of contract terms, ranging from 24 to 60 months;
  • Low deposit options available (subject to lender’s acceptance) – the initial payment is not a refundable deposit;
  • Option to include a maintenance package – while our advertised rates do not provide for a PCP contract, upon request we can provide this together with the option of a maintenance contract to cover the cost of all routing servicing, maintenance and tyres; and
  • Ability to own the vehicle at the end of the contract.

Disadvantages of Personal Contract Purchase

  • This is an ownership product and so it not suitable for an individual who is intent on the usership style agreement. However, please note that with a PCP agreement you do not own the vehicle until settlement of the guaranteed future value/balloon at the end of the contract;
  • Having equity in your vehicle is NOT guaranteed (i.e. a situation where the market value of the car is more than the guaranteed future value/balloon); and
  • If you decide to return the vehicle at the end of the contract, you will be charged for any excess mileage and for any damage outside of the BVRLA's Fair Wear and Tear Guide (available upon request).

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