Personal Car Leasing

Personal Car Leasing in the UK

Personal car leasing — usually written into the paperwork as personal contract hire, or PCH — is a long-term rental of a brand new car taken out in your own name rather than a company's. You choose the car, agree how long you want it for and how many miles a year you expect to drive, then pay a fixed monthly rental for the length of the agreement. Rentals for individuals are always quoted including VAT, so the figure you are quoted is the figure you pay.

It is a different arrangement from buying on finance: you are paying to use the car, not to own it, and there is no final balloon payment or option to purchase at the end. Whether that suits you depends on how you like to run a car, which is what the rest of this page is here to help you think through.

How Does Personal Car Leasing Work?

1. Choose your car. Pick the make, model and specification you want from the current UK range.
2. Set the terms. Agree a contract length and an annual mileage allowance; both change the monthly rental.
3. Apply. The funder runs a credit check in your name, as it would for any finance agreement.
4. Pay the initial rental. This is the first larger payment, taken shortly before or after delivery.
5. Drive it. Fixed monthly payments follow, with UK road tax and the manufacturer warranty covered for the term.
6. Hand it back. At the end the car is collected, with nothing more to pay if it is within the agreed mileage and in fair wear and tear condition.

Insurance, fuel or charging, servicing and tyres are not included in a standard rental. A maintenance package can be quoted alongside the lease if you would rather budget for servicing and tyres monthly too.

Who Is Personal Car Leasing Suitable For?

Leasing tends to appeal to drivers who like a predictable monthly cost, want a brand new car with a full manufacturer warranty, and are comfortable handing it back at the end rather than owning it. It also suits people with a fairly settled annual mileage, because the contract is built around that figure.

It is likely to be a poorer fit if your mileage is very high or unpredictable, if you want to keep a car for many years, if you need to modify the vehicle, or if you may need to end the agreement early — early termination charges apply. Leasing is also a credit agreement, so approval is never guaranteed. If you are leasing through a company instead, see business car leasing, where rentals are quoted excluding VAT.

Choosing Your Lease

Three choices shape what you pay each month: the car itself, the contract length and the annual mileage, with the size of the initial rental adjusting the balance between upfront and monthly cost. It is worth asking for a couple of combinations side by side rather than fixing on one, because a small change in mileage or term can move the monthly figure more than people expect.

Mileage, Contract Length and Initial Rental

• Annual mileage. Be honest about the miles you actually cover, holidays and family trips included. Miles over the allowance are charged at a pence-per-mile rate set out in your agreement, and building them in at the start is normally cheaper than settling up at the end.
• Contract length. Terms usually run from two to four years. A longer term generally lowers the monthly rental but commits you for longer, and takes the car further through its warranty.
• Initial rental. Often quoted as a multiple of the monthly payment, such as three, six or nine months. A larger initial rental reduces the monthly figure; a smaller one keeps more cash in your pocket at the start. It is a first rental, not a deposit, so it is not refunded.

Choosing the Right Car

Start with how the car has to fit your week — boot space, number of seats, parking at home, and the longest journey you make regularly — then narrow by specification. Every vehicle page here lists the body style, boot capacity, transmission, power and current factory lead time we hold for that derivative, so you can compare on facts rather than badge appeal.

• Tesla Model 3 leasing
• Volkswagen Golf leasing
• Nissan Qashqai leasing

You can also compare available cars or browse by manufacturer.

Electric, Hybrid and Petrol Cars

All three are available to individuals. An electric car makes most sense if you can charge at home overnight; if you cannot, check what public charging is realistic near home and work before committing. Hybrids suit mixed driving where charging is awkward, while petrol and diesel remain sensible for high or irregular motorway mileage. If you are weighing up an EV, you can explore electric car leasing or view Tesla lease options, and hybrid car leasing lists the hybrids we currently hold.

What Happens at the End of a Personal Lease?

The funder arranges collection and the agreement ends. Before that, the car is inspected against fair wear and tear standards and your mileage is checked, so any excess miles or damage beyond fair wear and tear are charged then. Most people give the car a clean, sort out any small kerbed wheels or chips beforehand, and order a replacement in good time so the new car arrives as the old one goes back — lead times vary by model.