Personal Contract Hire: Method to Get A Car Without Affecting Finance

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Is buying a car always essential to fulfil a dream? Does making massive saving crucial to funding a vehicle? Like this, numerous questions may disturb you. If you are finding the perfect suggestion, then read this blog. 
Having substantial savings or buying a car is not a financial friendly decision. Purchasing car means, you have to consider numerous things, like:

  • Saving 
  • Financial outcomes 
  • Maintenance cost 
  • Prepare for sudden expenditures 

It may be hectic if you have a limited source of income, and if somehow you purchase it, then there is a probability that you affect the finance for a long time. There is an alternative named “Personal Contract Hire”.

What Is Personal Contract Hire?

It is also known as PCH, and it is the method through which you can acquire a car for two to four years. Though it depends on the provider, and which car you will get. Technically, with personal contract hire, the vehicle is on lease for specific years.

Now, you have to pay some monthly instalment, and the car providers fix that. However, the amount is not significant; you can easily add it in the monthly budget.

There is one problem that most of the people faces, “Difference between PCH and PCP (Personal Cost Purchasing)

Let’s understand the difference between to get the answer.

Personal Contract Hire Vs Personal Cost Purchasing

If we study, then both the term is similar to some extent. Paying instalment in regular interval is alike, and you can get a car for a particular duration, though it relies on the car leaser.

Now, the only difference is that, with PCH option, you cannot gain the ownership of the vehicle. In the case of Personal Cost Purchasing, you can purchase the ownership of the car. It may sound unbelievable, right?

It is the difference between the PCH and PCP.

Now, specific questions need to be answered. We have covered them below, and you can go through them one-by-one.

Does Cancelling The PCH Agreement Introduce Cost?

It may happen that you do not want to pursue the service and wants to cancel it. In case of termination, the care providers may charge some fees.

Now, you may have to pay some fees that are roughly 50% of the car agreement. It may seem costly, but if in case of dissatisfaction, there is no need to continue the service. Nevertheless, it depends on you and your current financial situation.

Can People With Bad Borrowing History Avail PCH Service?

A less-than-stellar credit score shows that you have poor borrowing history. And, it is quite challenging for a person to remove it. However, it is a common problem these days, and for a solution, numerous options, like bad credit car finance on the instant decisionare available.

You can avail funds with such methods to fund a car, and fulfil your dreams. So, if you have a poor credit score, then there is no space for worry. Even with such an option, you can improve the credit rating that will facilitate you in future.

Now let’s have a look at the advantages as well as disadvantages of the Personal contract hire. With this reading, you can make a better decision.

Benefits and Limitation of the PCH

We have covered both aspects of it. You can read them below.

Pros of Personal Contract Hiring

There are four significant gains:

  • Easy To Access 

You can get a car at any moment that requires no preparation. According to the need, service is available.

  • Can Fund The Latest Model Of Cars

 No matter how costly the car, you can easily fund it without worrying about purchasing.

  • No Additional Charges If The Car Loses More Rate Than Expected 

When you purchase a car, then you cannot sell at the same price. It is known as depreciation, which affects the car’s selling price. But, here you do not have to sell it; you can use and return it.

  • Maintenance Cost Could Be Included 

Numerous companies include the maintenance cost that reduces the additional expense. It depends on the firm.

Cons of Personal Contract Hiring

There are three drawbacks of this service that should know.

  • Damage Charges 

If there is any significant damage occurs, the company may charge you the additional cost.

  • No Option For Purchasing It 

In case you like the car, you cannot buy it. It may hurt the sentiments.

  • Difficult To Stop Service Before The Term Expires 

If you want to end up the service before the due date, then you may end up by paying a significant amount.

These are both aspects of the personal contract hire. Conversely, cons may not stop you from leveraging this service. It could be the right option because here you are fulfilling the dreams without affecting the money life. Isn’t it amazing? So, what resist you now, go and have your dream car on PCH.

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