Depreciation can often put people off buying a brand new car. However, there’s one way to avoid the worry of losing money on a shiny new vehicle - Personal Contract Hire (PCH).
This type of deal is perfect if you don’t want to own the car at the end of the agreement. Historically seen as a way to source a company car, Personal Contract Hire deals are now gaining popularity with mainstream buyers.
PCH packages are fairly flexible in how they can be set up, with such factors as deposit amount and term able to be tailored around you and your needs.
With PCH, you’re essentially hiring the car and paying for what you use. The agreement starts in a similar fashion to other finance types, but the deposit is labelled as the 'Initial Rental' and is made up of so many monthly payments.
This Initial Rental combines with the amount of months the agreement is made up of to create what is referred to as the 'Profile'. So, for example, if your deposit is made up of three monthly payments and there are 35 subsequent monthly payments to make, then the Profile would be 3+35.
Once all these monthly payments have been made, the agreement is over and you hand the car back, leaving to begin another agreement if you see fit.
- Depreciation-free motoring as you are basically paying to use the car till the end of the contract
- Payments will usually be more affordable as there is no interest to be paid and you're not paying to own the car
- PCH deals can sometimes include maintenance packages to get servicing included in the payment
- You will be given an allotted annual mileage and if this is exceeded at the end of the contract, you will have to pay per additional mile (usually between 4-14.9p per mile)
- Any damage to the car that exceeds the fair usage policy will have to be covered by yourself
- The only two options you will have come the end of the contract are to either walk away or start a new contract on a new car. There is no option to buy like there is on Personal Contract Purchase
For the purpose of this promotion Stoneacre is not acting as a lender but as an independent credit broker working with a panel of lenders. A list of these lenders is available upon request. Stoneacre do not charge a fee for an introduction to a finance provider, however, we may or may not receive a commission.
Decidebloom Ltd t/a Stoneacre, Omega Boulevard, Capitol Park, Thorne, DN8 5TX, is authorised and regulated by the Financial Conduct Authority. Our FCA number is 308726. You can verify this by visiting the FCA website or by contacting the FCA on 0800 111 6768.