Personal Leasing

If you are intending to pay your monthly rental payments from a Personal bank account then you are a Personal leasing customer.  All the rates available to Personal customers on this site are listed as Including VAT.

VAT is currently charged at 20% in the UK so please be careful when comparing prices between leasing companies because some of our (ahem) less scrupulous competitors sometimes accidentally omit that there is an additional 20% VAT to pay on advertised rentals.  All our Personal lease offers already include VAT

Regulated or Unregulated Contracts

All personal leasing customers, sole traders and partnerships with up to four partners are entered into Regulated Finance Contracts which offers them specific protection from the Financial Conduct Authority (FCA) including very specifically defined cooling off periods during which you have time to consider whether you really want to enter into this finance agreement.  Cancellation of your finance contract within this cooling off period can be made without reason being given and you will not be subject to any penalties from the finance provider.

Personal Contract Hire

Also known as PCH or Personal Leasing.  This finance option will benefit a personal individual who wants a fixed monthly cost and is seeking to eliminate the financial risk associated with disposing of a vehicle.  Personal contract hire best suits an individual who simply requires a vehicle to use and who is not looking for an option to purchase the vehicle at the end of the contract period.  Contract Hire vehicles can sometimes be purchased at the end of the contract but the price is defined at the end of the contract, not the beginning, and the finance company is under no obligation to sell you the vehicle.

Personal Contract Hire is a long-term vehicle rental agreement where you pay to ‘rent’ the vehicle throughout the duration of your contract, and then return the vehicle at the end of the agreement, leaving the finance company to worry about depreciation values and disposal of the car.  If you choose to lease a car on a Personal Contract Hire basis, you will make a series of monthly payments for the duration of your lease agreement typically between 18 and 60 months, having already paid an initial rental.  You pay for the use of the vehicle throughout your contract, and then return the car to the finance company at the end of the agreement without any further obligations, leaving you free to lease or purchase another vehicle.  In some cases (subject to approval from the finance provider), you may be able to extend the vehicle contract or purchase the vehicle but the purchase price is defined at the end of the contract, not the beginning, and the finance company is under no obligation to sell you the vehicle..

Key Features of Personal Contract Hire;

  1. Personal Contract Hire is the most common form of private car leasing
  2. Fixed monthly rentals cover the rental of the vehicle, plus any maintenance options if chosen
  3. The monthly rentals are calculated by taking into consideration; the cost of the vehicle, the contract period, the anticipated residual value of the vehicle (how much the vehicle is likely to be worth at the end of the contract), the mileage allowance (as chosen by you before the start of your contract) and any additional options, such as a maintenance contract
  4. Vehicle tax is provided for the full term of the contract
  5. You never technically own the vehicle – it remains the property of the finance company. However, this means you do not need to worry about the vehicle’s depreciating value

Key Benefits of Personal Contract Hire;

  1. Low initial rental
  2. Fixed rentals for the whole package, making budget planning easier
  3. Flexible terms to meet your finance requirements and driving habits – with variable contract duration and mileage terms
  4. Maintenance of vehicles can be included in the monthly fees, spreading the cost
  5. Allows you to use a vehicle that might otherwise be unreachable in terms of its on-the-road (OTR) cost
  6. When returning the vehicle at the end of your agreement, you do not need to worry about its depreciation or disposal

Other Considerations for Personal Contract Hire

  1. Early Termination – If you need to exit the agreement before the end of the contract there is likely to be an early termination charge that will be payable. Full details of the scale of this termination charge will be provided in your Terms and Conditions
  2. Change of Circumstances – Most finance providers allow you to alter the agreement once it has been setup. However some don’t and some that do may impose restrictions on how and when you can make alterations.  For example if you change job during the lease contract and the new commute to work means that you go over your mileage allowance you may be liable for an excess mileage charge at the end of the agreement.  If you are concerned about this speak to us and we can check the terms of the finance provider in question to see if they allow mid contract amendments.
  3. If you have exceeded your agreed mileage, an excess mileage charge will be payable, worked out on a ‘pence per mile’ basis as set at the start of your contract
  4. You must return the vehicle in a well maintained condition. Any damage over and above that stated in the Fair Wear and Tear Guide will be subject to additional charges
  5. Vehicle must be insured with full comprehensive cover
  6. Vehicle Modification – The vehicle cannot be modified in any way.
  7. You may never own the vehicle as there is usually no option to buy it

At the end of the contract, the vehicle is returned to the leasing provider, meaning you are then free to hire another vehicle or vehicles, without any financial obligation.  If you have exceeded your agreed mileage, an excess mileage charge will be payable, worked out on a ‘pence per mile’ basis as set at the start of your contract.  When returning your vehicle, it will also be assessed according to the BVRLA Fair Wear and Tear guidelines.  Any damage that falls outside of these guidelines may be subject to end-of-lease penalty charges.  For more information on this, request a copy of our Fair Wear and Tear guide.

FAQs

  1. Is personal contract hire subject to VAT? Yes, VAT is charged at the prevailing rate.  Personal Contracts on this website all include VAT so you know exactly how much a vehicle costs you each month.
  2. What are the criteria for being able to get a vehicle on lease? We will introduce you to one of our panel of finance providers.  All finance providers have certain criteria that needs to be met in order to accept an individual for a contract.  Customers must be over 18 years of age, hold a valid UK driving licence, have 3 years’ employment history and will need to meet the minimum requirements of the relevant finance provider.
  3. Can I lease a vehicle with only one rental in month one to keep the initial outlay to a minimum? Some finance companies will allow this but in most cases the provider will require the applicant to have a strong credit rating.  Please ask us if you are interested in this type of payment profile.
  4. Is Insurance included as part of the standard lease price? No, insurance is not included in the monthly rental. It is a stipulation of a Contract Hire or Personal Contract Hire agreement that you have a Comprehensive insurance policy in place prior to delivery of the vehicle
  5. Can I part exchange my current car as part of the lease agreement? No not directly but we do work with partner who can provide you with a part exchange price and then we could tie in collection of your part exchange vehicle with delivery of your new lease vehicle.
  6. Who supplies the vehicles that you offer on lease? We work with a premier network of franchised supplying dealer groups across the country, scouring their rates daily for who is offering the best purchase terms.  These suppliers are approved by the manufacturers and will look after delivery of your vehicle.
  7. What is the initial outlay? Finance companies request an initial rental that is usually made up of between 3 and 9 multiples of the monthly rental and this is taken in month one of the contract.  In some occasions the finance provider may consider one rental in month one subject to the strength of the individuals credit.  This initial payment should not be seen as a deposit payment but it does allow customers with a low cash outlay to enter into this type of lease contract.
  8. What does ‘payment profile’ mean and what options do I have? The payment profile refers to the number or value of the initial rental and how many subsequent monthly rentals are contracted within the lease.  For example you might see reference to 3+35 which is a 36 month lease with 3 rentals in month 1 following by 35 monthly rentals.

Personal Contract Purchase (PCP)

Personal contract purchase or PCP is a vehicle finance agreement available to individuals only (i.e.  not businesses).  After an a initial deposit and a series of monthly payments which effectively cover the vehicle’s depreciation, this type of lease gives you the option to purchase the vehicle or return it to the finance company at the end of the agreement.

With Personal Contract Purchase, the monthly finance payments are not subject to VAT, although if an optional service package is taken, VAT is payable on the service costs.

If you lease a car on a PCP basis, you will be required to pay an initial deposit, followed by a series of monthly payments for the duration of your agreement of anything between 18 and 60 months.  These monthly payments effectively cover the vehicle’s depreciation.  As such, when your agreement comes to an end, there is still an outstanding amount of money due to be paid – known as the balloon payment.  You can either choose to pay this amount and own the vehicle, or not pay it and return the vehicle to the lease company.

At the start of your contract, an agreement will be made as to what the car will be worth at the end of the contract – you may see this referred to as the Minimum Guaranteed Future Value (or MGFV) or sometimes called the balloon.  The monthly payments are the cost of the vehicle after the MGFV and the value of your deposit have been deducted.

Key features of Personal Contract Purchase

  1. A minimum guaranteed future value (MGFV) – or balloon payment – is agreed at the start of the contract.
  2. Fixed monthly payments cover the rental of the vehicle, plus any maintenance options if chosen, throughout the duration of the contract.
  3. The monthly payments are calculated by taking the following into consideration: the cost of the vehicle, the contract period, the agreed residual value to be paid at the end of the agreement, the mileage allowance (as chosen by you before the start of your contract, and any additional options, such as a maintenance package.
  4. At the end of agreement, when all payments have been made, ownership passes to the customer – if you choose to not return the car.
  5. Vehicle tax is provided for the first 12 months of the contract.

Key Benefits of Personal Contract Purchase

  1. Low initial rental
  2. Fixed rentals for the whole package, making budget planning easier.
  3. Flexible terms to meet your personal finance requirements and driving habits – with variable contract duration and mileage terms.
  4. Maintenance of vehicles can be included in the monthly fees, spreading the cost.
  5. The finance company guarantees the resale value of the vehicle at the end of the agreement for a known and fixed amount – no risk of negative equity.
  6. Ownership passes to you at the end of the agreement, if you choose it to, once all payments have been made.
  7. Allows you to drive the car of your choice without the risk – if you’re happy with the vehicle at the end of your contract, you can choose to keep it. If not, or there’s another car you’d like to try for a few years instead, you can simply hand the vehicle back.

At the end of the contract you have three options;

  1. Hand the vehicle back to the finance company (and therefore do not pay the balloon payment)
  2. Pay the balloon payment outright and own the vehicle
  3. Refinance the final balloon payment if applicable, subject to credit – that means pay the balloon payment in monthly instalments. At the end of these payments, you own the vehicle

If you choose to return the vehicle to the finance company, and you have exceeded your agreed mileage, an excess mileage charge will be payable, worked out on a ‘pence per mile’ basis as set at the start of your contract.  When returning your vehicle, it will also be assessed according to the BVRLA Fair Wear and Tear guidelines.  Any damage that falls outside of these guidelines may be subject to end-of-lease penalty charges.  For more information on this, request a copy of our Fair Wear and Tear guide.

FAQs

  1. Is Personal Contract Purchase subject to VAT? There is no VAT charged on Personal Contract Purchase rentals.
  2. What are the criteria for being able to get a vehicle on lease? We will introduce you to one of our panel of finance providers.  All finance providers have certain criteria that needs to be met in order to accept an individual for a contract.  Customers must be over 18 years of age, hold a valid UK driving licence, have 3 years’ employment history and will need to meet the minimum requirements of the relevant finance provider.
  3. Can I lease a vehicle with only one rental in month one to keep the initial outlay to a minimum? Some finance companies will allow this but in most cases the provider will require the applicant to have a strong credit rating.  Please ask us if you are interested in this type of payment profile.
  4. Is Insurance included as part of the standard lease price? No, insurance is not included in the monthly rental. It is a stipulation of a Personal Contract Purchase agreements that you have a Comprehensive insurance policy in place prior to delivery of the vehicle
  5. Can I part exchange my current car as part of the lease agreement? No not directly but we do work with partner who can provide you with a part exchange price and then we could tie in collection of your part exchange vehicle with delivery of your new lease vehicle.
  6. Who supplies the vehicles that you offer on lease? We work with a premier network of franchised supplying dealer groups across the country, scouring their rates daily for who is offering the best purchase terms.  These suppliers are approved by the manufacturers and will look after delivery of your vehicle.
  7. What is the initial outlay? Finance companies request an initial rental that is usually made up of between 3 and 9 multiples of the monthly rental and this is taken in month one of the contract.  In some occasions the finance provider may consider one rental in month one subject to the strength of the individuals credit.  This initial payment should not be seen as a deposit payment but it does allow customers with a low cash outlay to enter into this type of lease contract.
  8. What does ‘payment profile’ mean and what options do I have? The payment profile refers to the number or value of the initial rental and how many subsequent monthly rentals are contracted within the lease.  For example you might see reference to 3+35 which is a 36 month lease with 3 rentals in month 1 following by 35 monthly rentals.

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