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Car finance: what is Personal Contract Hire (PCH)?

  • How does PCH work?
  • Would personal contract hire suit me?
  • Parkers explains how leasing works

Personal Contract Hire (also called PCH or leasing) is a form of car finance whereby the vehicle is effectively hired from the finance company for a set period of time. It's rather like long-term holiday rental.

How does personal contract hire work?

After an initial deposit, monthly payments are made throughout the contract period. Unlike personal contract purchase (PCP), there is no option to buy the vehicle outright at the end of the hire term – it must be handed back. Additional fees may be issued if drivers exceed the agreed mileage limit or return the car with any damage.

Do I need it?

Personal Contract Hire can get you behind the wheel of cars you wouldn’t usually be able to afford. For those who don’t mind driving a rented vehicle, PCH is an attractive proposition. Don't want to own a car outright? This might be a form of car finance for you. Don't forget to visit the Parkers Finance section for heaps more advice.

Available on

Almost every car on sale today.

Similar to

Personal Contract Purchase (PCP)

Looking for more jargon-busting motoring meanings? Head over to our Parkers Car Glossary page and take a look at our other definitions