Knowing More about Personal Contract Hire

personal contract hire

Leasing comes with low monthly payments. This allows people to drive good-as-brand-new cars without spending too much. Vehicle leasing companies, such as ALD automotive, offer flexible and reliable leasing options to their customers. One of them is the Personal Contract Hire.

What is Personal Contract Hire?

A personal contract hire is an agreement that allows a person to use and take control of a car for a specific period of time. The car will be used by the person who secured the contract hire deal but the ownership or the title of the vehicle will remain with the company. The agreement requires a fixed monthly instalment to be paid until the contract ends. When the contract expires, the vehicle must be returned to the leasing company.

The monthly payments are computed by deducting the estimated Future Value of the car (residual value) from its Current Value (Market value). The difference will be divided into months. The vehicle leasing company will ask you to stick to a certain mileage limit — anything in excess could lead to a penalty.

Advantages and Disadvantages of Personal Contract Hire

The advantages of personal contract hire (PCP) include:

  • A fixed monthly payment – there is no extra nor hidden charges. The monthly payment stated on the contract is fixed, unless there is a breach of contract. This allows the lessee to budget their income.
  • Low down-payment – personal contract hire only requires the client to pay three months in advance.
  • Road-tax exemption – road tax is included in the monthly payment.
  • It is cheaper – personal contract hire is cheaper than a bank loan.
  • Maintenance – some vehicle leasing companies offer maintenance packages that can be included in the monthly payments.
  • The lessee will return the car after the contract – therefore, there is no need to worry about depreciation or maintenance of the car at the end of the term.
  • The lessee can have access to luxury cars – the monthly payments are based on the FUTURE and CURRENT market value of the car. Luxury cars depreciate at a slower rate. As such, the difference in value is small, resulting in a low monthly payment.

Personal contract hire can be beneficial to a lot of people – especially to those who cannot afford to pay cash for a luxury car. ALD automotive offers flexible a personal contract hire that can suit your budget. We also offer a variety of finance options for you and your company. Yes, getting a new car has never been so easy!

Call us on 087000 111 81 for enquiries. You may also reach us online by completing the contact form.

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