Personal car leasing explained
Personal car leasing, usually provided through Personal Contract Hire (PCH), lets you drive a new car for an agreed period in return for an initial rental and fixed monthly rentals. You choose the car, contract length and annual mileage at the start. When the agreement ends, you return the vehicle rather than owning or selling it.
It can suit drivers who value predictable costs and regularly changing to a new vehicle. It is not a purchase agreement: there is normally no option to own the car, and charges can apply for excess mileage, damage outside fair wear and tear, or ending the agreement early.
Compare personal car leasing deals
How does Personal Contract Hire work?
Choose your car and mileage. Select a vehicle and a realistic annual mileage allowance.
Set the contract. Typical options include different initial rentals and contract lengths. The available profiles vary by vehicle and funder.
Apply for finance. Agreements are subject to status, affordability and the funder's credit checks.
Drive for the agreed term. Keep the car insured, maintained and within the agreed mileage and usage conditions.
Return the vehicle. At the end of the lease, the funder arranges collection and assesses mileage and condition.
What is included in a personal car lease?
The rental covers use of the vehicle for the agreed term and mileage. Vehicle excise duty is generally included for the period stated in your agreement. Free mainland UK delivery is included with our advertised new-car leasing offers, subject to availability and delivery terms.
Comprehensive insurance is not included. Servicing, tyres and routine maintenance are only included when you select a maintenance package. Fuel or charging, parking, tolls, fines, excess mileage and chargeable damage also remain your responsibility.
Initial rental and total lease cost
The initial rental is the first payment, not a refundable deposit. It is commonly expressed as a multiple of the monthly rental, such as one, three, six or nine months. A larger initial rental usually lowers the following monthly amount, but it does not automatically make the agreement cheaper overall.
Compare the total contract cost, not only the headline monthly rental. Include the initial rental, all monthly rentals, any administration fees, maintenance if selected, and a realistic allowance for potential excess mileage.
Choosing the right mileage
Estimate commuting, regular journeys and leisure travel before choosing your annual mileage. A lower allowance can reduce the advertised rental but may cost more if you exceed it. Your quote and finance agreement will state the excess-mileage rate. Some funders may allow a mileage amendment during the lease, but this is not guaranteed, so contact us early if your usage changes.
What happens at the end of the lease?
The car is returned to the finance company. It should have its supplied equipment, keys and documentation and meet the funder's return requirements. Normal deterioration from careful use is expected; damage beyond the applicable fair wear and tear standard may be charged. Read our fair wear and tear guide before collection and arrange repairs in advance where appropriate.
Personal car leasing FAQs
Can I buy the car at the end?
PCH is designed around returning the vehicle. You should not enter the agreement on the assumption that you will be able to buy it later.
Can I end a personal lease early?
Early termination may be possible with the funder's agreement, but a substantial charge can apply. Ask for a settlement quotation before making plans to return the car.
Can I lease an electric car personally?
Yes. Compare our electric car leasing deals and consider home or public charging access, real-world range and your regular journeys.
Is personal car leasing subject to VAT?
Personal lease prices are shown including VAT. Individuals cannot normally reclaim that VAT.
Will I be accepted for a lease?
Acceptance is subject to the finance provider's status, affordability and credit checks. The cheapest advertised deal may not be available to every applicant.
Find your next personal lease car
Browse all car leasing deals, compare car leasing special offers, or explore vehicles by manufacturer. If you are leasing through a company, read our business contract hire guide instead.
