Personal Contract Hire (PCH) is a fixed-cost rental agreement. You choose a new vehicle, agree the maximum annual mileage and length of contract, then pay an initial fee followed by monthly rentals to suit your budget. Some agreements even include vehicle maintenance, the cost of which is added to your monthly fee.
Car leasing means you don’t have to worry about depreciation, warranty or vehicle disposal at the end of your contract. It’s effectively a long term rental: you pay a fixed monthly fee to use the car for an agreed amount of time and mileage.
At the end of the contract, you must return the vehicle. If the car is in good condition – subject to fair wear and tear - and hasn’t exceeded the agreed mileage, you’ll have nothing further to pay. Otherwise, excess charges may apply.
Fair wear and tear occurs when conventional operation causes acceptable deterioration to a vehicle. It shouldn’t be confused with damage, which occurs as a result of a specific event or series of events, such as impact, inappropriate stowing of items, harsh treatment or negligence.
End of contract changes explained
In the excitement of receiving your vehicle, the end of contract process if often overlooked and important literature can be disregarded. Yet, on entering a lease or rental agreement with you, your leasing company or finance provider must explain their terms and conditions clearly.
You should be made aware of the end of contract vehicle return standard, including the condition of the vehicle, the presence and condition of keys, accessories and equipment, and how they require customers and drivers to look after the vehicle during the lease.
Many of the large FN50 leasing companies (Lex Autolease, Leaseplan, Arval) have strict end of contract processes compared to other leasing companies, like Ogilvie Fleet, Zenith and ALD Automotive. However, if you’re worried about pending damage invoices when you return your vehicle(s), don’t hesitate to get in touch with us.
Confused by the literature, or not aware of the process? Let us do the hard work for you…