Private Car Leasing

There are many different methods of Private car leasing, but one of the most cost effective is personal car leasing. However, to know which method of private car leasing and how it works, please read the following guide to enable you to make an informed decision on the most appropriate car leasing option.

Quick links:

• What is private car leasing?
• What is personal contract hire and how does it work?
• What is personal contract purchase and how does it work?
• Which method of private car leasing is right for you?

What is private car leasing?

Private car leasing (also known as 'personal car leasing') is when you pay a set monthly rental to a leasing company to drive a car, this will be for a set contract period, usually 2 to 3 years although 4 years is also quite common. At the end of the period, the car is then returned to the car leasing company.

Payments are calculated by taking the On The Road cost of the car, applying an estimated future value (residual value), road fund license, a maintenance contract (optional) and interest charges.

Personal Contract Hire

Personal car leasing is commonly known as personal contract hire, this is the most common form of private car leasing. This method of vehicle acquisition is described above.

You need to be aware that as the contract mileage is preset and the residual value for the car is based on its anticipated contract mileage, exceeding this mileage will result in an excess mileage charge. We know the restrictions that apply with the different leasing companies we use and are able to negotiate on your behalf, a revised rental should you find you are likely to exceed the mileage set.

Personal Contract Purchase

Personal contract purchase works in exactly the same way as personal contract hire - but with two exceptions. This form of private car leasing gives you the option to buy at the end of the payment period, PCP's also make no provision for Road Fund License other than for the first year.

A balloon payment is set by the leasing company at the beginning of the agreement, each leasing company view these values differently which is largely why the monthly costs vary from company to company. As already mentioned, this is an optional payment, the car can be returned at the end of the contract is you prefer.

Which method of private car leasing is right for you?

Personal Contract Hire and Personal Contract Purchase both require only a small initial deposit, although, subject to underwriting, a higher level of deposit may be required.

Choosing between the two methods of private car leasing is dependent on your circumstances.

Whichever method of private car leasing you choose be sure to talk to one of our highly experienced knowledgeable representatives who would be delighted to discuss this with you.