How Does Personal Contract Hire Work?
Personal Contract Hire (PCH) agreements are becoming increasingly popular in the UK, yet many drivers who could benefit from this funding method are still opting for car loans, hire purchase agreements or personal contract purchase (PCP) agreements to acquire their vehicle.
Choosing the right model, specification and colour of your new Honda is important, but knowing which form of finance will offer the best value for money for you, given your personal circumstances, is equally important and can have a significant impact on the overall costs of driving your new car.
Customers who choose personal contract hire are essentially renting a car for a set period of time and mileage, (usually between 24 and 60 months and any annual mileage between 5,000 and 40,000 miles per year). At the end of the agreement the car is simply handed back to the lease company and the customer starts a new agreement on their next choice of vehicle. Monthly rentals are dependent upon the model, the term and the annual mileage that the customer has chosen.
Low deposits and low monthly rentals are an attractive feature of personal contract hire agreements, often making new Honda cars affordable to customers who have traditionally purchased used examples. Deposits are usually the equivalent of three months rentals, but can be tailored to suit your budget.
Hondacare Assistance and Road Fund Licence are always included in the rental for the full contract duration and most customers also opt for the money saving ‘maintenance package’. For an additional monthly rental all of the cars servicing and maintenance requirements can be catered for, this includes all servicing (every 12 months or 12,500 miles) and all consumable items such as tyres, brake pads, brake discs, batteries, exhausts and even wiper blades for the full contract duration.
Choosing the correct annual mileage at the start of the agreement is of course important, but with Vertu Honda you have the ability to alter your total contract mileage free of charge should your circumstances change. Contract mileages can be adjusted up or down at any time except within the first twelve months or last seven months of the agreement and your monthly rental will be increased or decreased accordingly.
It is fair to say that although personal contract hire may be perfect for a lot of customers, it may not be for others. Here are the things which you need to know before committing to a personal contract hire agreement.
- If you exceed the anticipated mileage on the agreement, you will receive an excess mileage charge when handing the car back. This is why we offer you the facility to adjust the contract mileage midterm.
- Although a certain amount of fair wear and tear is expected when handing the car back, any other damage to the car may result in a charge. In effect, this is no different to when you tradein a car that you own when the cost of repairing any damage is taken into account with your part exchange valuation.
- A personal contract hire agreement is not a finance agreement but a fixed term contract. Therefore, handing the car back early before the contract term has finished, will result in an early termination penalty. Many lease companies charge all of the outstanding rentals as an early termination penalty. However, Honda Contract Hire will only charge the equivalent of half of the outstanding rentals.
Why Choose Vertu Honda?
Vertu Honda offer some of the most competitive rentals for new Honda cars as well as some other key benefits:
- No documentation charges or initial set up fee’s
- Free delivery to any UK mainland address/li>
- All cars are delivered on a transporter (unless you live locally, in which case we will drive the car to your home / work address or you can collect from the supplying dealership)
- Expert advice from our Fleet Specialists – there are two in each of our dealerships, ask for the Platinum Program representative
- Personalised quotations based on your choice of car, term, annual mileage and preferred options
- 3 years 90,000 miles Honda warranty
- Hondacare Assistance for the contract duration
- Road Fund Licence for the contract duration
- Contract mileage adjustment facility
The Vertu Honda Group has a team of Fleet Specialists that are able to provide advice and assistance, so if you have any questions or would like a personalised quotation please contact your local Vertu Honda dealership and ask for one of the Platinum Program Representatives.
Example contract hire rentals are based on 10,000 miles per annum, non-maintained and solid paint finish. Excess mileage and other charges may apply dependent on the mileage and condition of the vehicle at the end of the contract. All Personal Contract Hire rentals include VAT. All figures are correct at time of publication but may be subject to change. Library images shown for illustration purposes only.