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What is PCH? A Complete Guide to Leasing

Heard about PCH but not sure what it involves? Our complete guide to leasing will help you decide if it’s the right finance option for you

Written by Verity Hogan
Written by Verity Hogan
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What is PCH?

Are you always getting itchy feet? Does the idea of long-term commitment send shivers down your spine? Don’t worry; we’re not asking about your love life, just the relationship you have with your car!

If you like the thought of being able to change cars every couple of years and owning a car isn’t important to you, then leasing through PCH could work for you.

PCH is short for personal contract hire and it’s a type of long-term rental agreement that usually lasts between two and four years.

You’ll pay fixed monthly payments for as long as your agreement lasts, but you won’t have the option to buy the car. When your agreement ends, you have to give it back – even if you really don’t want to!

Unfortunately, we don’t currently offer PCH at CarFinance 247 (it’s typically only available on new cars), but that doesn’t mean it’s not the right car finance option for you. 

How does car leasing work?

If you do think that car leasing could be for you, you’ll first need to decide how long you’d like to have the car for.

Then, you’ll usually need to pay a deposit upfront, followed by fixed monthly payments until the end of your agreement.

But, that’s not all. You’ll also have to agree how many miles you can drive during your lease and what kind of condition the lender expects the car to be kept in.


What happens at the end of a PCH agreement?

Reached the end of your lease?

Just hand the car back and walk away!

That is unless you’ve done more miles than you agreed or had any big bumps and scrapes – both will leave you paying extra charges.

If your car’s been put through its paces over your lease period, you might want to pay a visit to the garage before you hand the car back to fix any issues. And don’t forget to have the car cleaned inside and out!

Is leasing right for me?

  • Do you love that new car feeling?

  • Are you usually a safe and careful driver?

  • Is car ownership overrated?

If you answered yes to any of these questions, leasing could work for you.

Not sure yet?

Check out the pros and cons to find out whether PCH leasing could be the right finance option for you.  

Why choose PCH car finance?


  • You’re free to change car regularly
  • You don’t have to worry about reselling the car – you can forget about depreciation!
  • Monthly costs are often lower than they would be with other finance options
  • You might be able to drive a car you wouldn’t usually be able to afford
  • Options are available with maintenance packages built-in – no extra repair costs


  • You won’t be able to buy the car at the end of your lease
  • You’ll have to pay extra is you drive more than the agreed number of miles
  • You’ll have to pay extra for any damage
  • If you don’t keep up with your repayments, the finance company could take your car back
  • You’ll be tied in for the full length of your lease and may have to pay extra if you want to end it early



Alternative car finance options to PCH

PCH not for you? Don’t worry; there are plenty more car finance options out there, including Personal Contract Purchase and Hire Purchase!

Personal Contract Purchase (PCP)
If you’re a careful driver looking for a flexible finance option, PCP could work for you. You’ll pay a deposit and monthly payments for a certain length of time but, at the end of your agreement, you can choose to buy the car, return it, or trade it in for a new one. Terms and conditions will apply – you’ll need to agree to a set mileage and not damage the car to avoid extra charges. You can find out more about PCP here.

Hire Purchase (HP)
With HP, your loan is secured against the car you’re buying and it won’t officially belong to you until your final payment. Usually, you’ll pay a non-refundable deposit and then repay the rest in instalments, plus interest, for anything from 12 months to 5 years. You can find out more about HP here


PCH Jargon-busting

Take a look at our quick-fire guide to the PCH finance terms you need to know:


This is how much your car will reduce in value over time.

Mileage Limit

The number of miles you can drive will be set at the start of your agreement and you’ll be charged for every mile you go over it.

Finance agreement

Your finance agreement is your car finance contract. It should include how much you have to pay each month, any limits on the number of miles you can drive and rules for how you should take care of the car, as well as how and when you can cancel and what’ll happen at the end of your agreement.


The nuts and bolts…

  • PCH is a form of car finance where you lease a car for an extended period of time

  • At the end of your lease, you simply hand the car back – you never own the car

  • You will have to pay extra charges if you go over the number of miles you agreed to drive or if you damage the car

  • Monthly payments can be lower than with some other car finance options and you don’t need to worry about the car losing value over time

Ready to explore your car finance options?

We work with a panel of lenders to find a car finance option that works for you. This means we can look to find loan options for people with a variety of credit histories, from excellent to bad credit car finance.

Get a quote now to find out more. Rates from 7.9% APR. Representative APR 21.9%.

Written by Verity Hogan
Verity Hogan

* The UK's largest online car finance broker by unique users to the website. Based on Similar Web data – 1,137,647 to CarFinance 247 vs. 753,819 for nearest competitor. January to June 2023.

CarFinance 247 is a trading name of CarFinance 247 Limited. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525).

CarFinance 247 is authorised and regulated by the Financial Conduct Authority for insurance distribution and credit broking (Firm Reference Number: 653019). CarFinance 247 is registered with the ICO (Registration Number Z1897658).

Finance is subject to status and is only available to UK residents aged 18 and over. Written quotations are available on request.

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