What is Personal Contract Hire (PCH)?

Personal Contract Hire leasing agreements are an affordable way to drive a brand new vehicle. The underlying contract is a regulated hire agreement where you agree to pay a monthly rental plus VAT for a period of time to use the vehicle.

How does it work?

Lombard Vehicle Solutions set a future re-sale value of the vehicle, which is based upon the anticipated mileage and the term of the agreement. This is then deducted from the discounted cash price of the vehicle. The payments are based on the difference with interest payments included. At the end of the agreement you simply return the vehicle, leaving you free to lease another vehicle should you wish.

Drivers, therefore, only pay for the proportion of the car's life that is used, thereby reducing the monthly payment. The vehicle is then simply handed back at the end of the contract and, assuming it is returned in a condition commensurate to its age and mileage, it has a full service history and that the agreement mileage has not been exceeded, there is no further payment to make. There is no option to own the vehicle at the end of the agreement.

What else do I need to take into consideration?

• You must be over 18 years old
• Vehicles are leased for private use
• Early termination will incur a penalty fee
• Excess mileage will be charged additionally as set out in the terms of the agreement
• You'll need to organise fully comprehensive insurance for the vehicle