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  • May 21, 2020

  • 2 min read

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Why lease? What's the difference?

Leasing a car is an increasingly popular way of financing a new vehicle, and means that instead of owning the vehicle at any point in a contract, you pay a fixed monthly cost towards the cost of the vehicle.

The key benefits of leasing are:

  • No hassle at the end of your contract, just hand the car back
  • No need to worry about selling your vehicle, or the depreciation value
  • We are here for you throughout your contract to help and support you
  • Allows you to change your car regularly
  • Monthly payments tend to be lower than other financing options
  • Option to take maintenance- this will cover other costs of vehicle ownership such as servicing, tyres and breakdown recovery
  • Road tax (VED) is normally included in your rental costs – along with luxury car tax
  • Low initial outlay and regular fixed rentals which make budgeting and accounting easier

Vehicle leasing is often referred to as Personal Contract Hire (PCH) if the agreement is between you and the leasing company, or Business Contract Hire (BCH) if the contract is through a business.

What are the key differences between PCH and BCH?

The contracts are essentially the same, however businesses may also be able to benefit from VAT reclamation of up to 50% of the monthly rental which is why Business Contract Hire rental payments shown are exclusive of VAT.

What is the difference between PCP and PCH?

The key difference between Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) is the option to own the vehicle at the end of the agreement, which you can do with a PCP (providing you pay off the final lump sum of the agreement) but not with a PCH.