What is Personal Contract Hire (PCH)?
Updated August 2026 · 4 min read
Personal Contract Hire (PCH) is a long-term car lease: you pay a fixed monthly rental to use a brand-new car for two to four years, then hand it back. You never own the car, road tax is included, and you drive within an agreed annual mileage. Most PCH deals need a credit check to start.
How does PCH actually work?
PCH is a rental agreement, not a loan. You choose a car, a contract length (usually 24, 36 or 48 months), an annual mileage and an upfront "initial rental", then pay the same fixed amount every month for the term. At the end you simply hand the car back — there is no big final payment and no option to buy. Because you are only ever paying for the use of the car, not its full value, the monthly figure is often lower than owning the same model on finance.
What's included in a PCH lease — and what isn't?
Included as standard: the vehicle, road tax (VED) for the whole term, manufacturer warranty and breakdown cover, and usually free delivery. What is not included: insurance (you arrange your own), fuel or charging, and routine servicing unless you add a maintenance package. If you want servicing, tyres and MOTs rolled into the monthly, most providers offer that as an optional extra — handy for budgeting, though it costs a little more.
What does PCH cost, and what changes the price?
Four levers move the monthly: the car you pick, the contract length, your annual mileage, and how much you put down as an initial rental. A bigger upfront payment lowers the monthly; a higher mileage allowance raises it. Deals are usually quoted as "initial rental + monthlies" — for example "9 + 35" means nine months' rental upfront then 35 equal payments. Our guide to no-deposit and low-deposit hire walks through the trade-off.
PCH vs car finance (PCP and HP): the key difference
The one distinction that matters: with PCH you never own the car — it is pure hire. With Personal Contract Purchase (PCP) or Hire Purchase (HP) you are buying the car on credit and can own it at the end. That makes PCP and HP consumer-credit agreements, which lean heavily on your credit history. PCH is a hire product, so it is a cleaner fit if you would rather just pay to drive and swap car every few years. Our hire vs leasing vs PCP guide compares all three side by side.
Does PCH need good credit?
Usually, yes — a standard PCH lease from a mainstream funder runs a full credit check and can decline a thin file, a recent default or a CCJ. That is exactly the gap short-term hire fills. It is judged on whether you can afford the monthly now, not on years of history, so drivers turned down for a lease are frequently approved for hire. Learn how the credit side works before you apply.
What if I want more flexibility than a 3-year lease?
A PCH deal ties you in for the full term, and ending it early carries a charge. If your situation might change — a new job, a growing family, a business finding its feet — a shorter, flexible agreement can make more sense. Fast Track introduces you to partners offering flexible short-term hire from a few months upwards, with no credit check to get a quote. You still drive a well-kept car; you just are not locked in for years.
FAQs
Do you own the car at the end of PCH?
No. PCH is pure hire — you hand the car back at the end of the term. There is no final "balloon" payment and no option to buy. If owning the car matters to you, PCP or Hire Purchase (both credit products) are the routes to ownership.
Is road tax included in a PCH lease?
Yes. Road tax (VED) is included for the full length of a PCH agreement, along with the manufacturer warranty and breakdown cover. Insurance, fuel and servicing are not included unless you add a maintenance package.
What is an "initial rental" on a lease?
It is the larger first payment you make before the monthly payments begin — the leasing equivalent of a deposit, though it is not refundable. A bigger initial rental lowers your monthly cost; a smaller one raises it slightly.
Can I get PCH with bad credit?
A mainstream PCH lease usually needs a credit check and can be declined for adverse credit. Short-term flexible hire is the common alternative — it is assessed on affordability now rather than history, and getting a quote involves no credit search.
What happens if I go over the agreed mileage?
You pay an excess-mileage charge — a set pence-per-mile rate agreed at the start — for every mile over your allowance. It is worked out and confirmed at the end of the agreement. See our mileage guide for how to estimate the right allowance.
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