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What is Personal Car Leasing?

What is Personal Car Leasing?

What is Personal Car Leasing?

Personal car leasing (also known as Personal Contract Hire or PCH) is a long-term vehicle rental agreement. It is a solution for private individuals to drive a brand new vehicle at a low monthly cost.

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.

At the end of the leasing period, the vehicle is simply returned, checked over and payments cease, leaving you free to lease another car.

What’s included?

  • Full Manufacturer’s Warranty
  • Road Tax
  • Maintenance Package (if selected as part of the contract) including all servicing and maintenance.
  • Free UK delivery

Benefits of Personal Car Leasing?

  • Drive a brand new vehicle every 2-5 years.
  • Fixed low monthly payments.
  • Fully bespoke contract, term and mileage – discussed, developed and tailored to your individual needs and budget.
  • Return the vehicle at the end of your agreement without the worry of depreciation or having to sell the vehicle.
  • Maintenance of the vehicle can be included in the monthly fees, spreading the cost. 

Considerations/Disadvantages of Personal Car Leasing

  • You must return the vehicle in a well-maintained condition. Any damage that occurs beyond the industry standard known as BVRLA Fair Wear and Tear Guide will incur charges.
  • Early termination fees apply if you terminate the lease early.
  • If you drive over the agreed mileage limit, an excess mileage fee (charged per mile) will be charged and is outlined in your agreement.
  • Vehicle must be insured with full comprehensive cover.
  • You will never own the vehicle as there is no option to buy it.

Credit Status/Am I eligible for a Personal Lease?

If you are considering entering into a personal lease agreement for your next car there will be financial checks you will need to go through, and information you will be asked to provide. 

You will need to meet certain criteria to qualify for a personal lease contract, these include:

  • Hold a full UK Driver’s Licence
  • You must be 21+ years of age
  • Have a regular, secure income
  • 3 years employment history
  • 3 years address history
  • Not been declared bankrupt, nor have CCJs or IVAs against your name
  • Be successful with your credit application

As part of the application process, you’ll need to undergo a personal credit check to assess credit strength and risk status. Most funders will ask for a ‘Good’ or ‘Excellent’ rating. Each application uses different criteria so we can't advise on specifics with regards to credit ratings but you can check your credit rating here.

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