# Thinking about leasing a car? Read this first Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-08-29 Category: TECHNOLOGY Category URL: https://financedigest.com/category/technology Meta Title: How to Choose Between PCP and PCH Car Leasing Options Meta Description: Our comprehensive guide by Jonathan Nolan at UK Carline helps you navigate between personal contract purchase (PCP) and personal contract hire (PCH) to make an URL: https://financedigest.com/thinking-about-leasing-a-car-read-this-firsthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd290817-9-1736843565051-compressed.jpg) When used correctly, leasing can be an easy and affordable way of driving the car you want. However, like any contract, it’s important to understand your options and to make a realistic decision on what vehicle to go for, based on what you can afford. When it comes to leasing a car, there’s a big difference between the types of contract available –  personal contract purchase (PCP) and personal contract hire (PCH) To help you understand your options, Jonathan Nolan, general manager at [UK Carline](http://www.ukcarline.co.uk/) has created a guide to help you make an educated decision, and to ensure you avoid any unnecessary debts at the hands of attractive car deals. **Do your research** There are two main types of personal leasing options available: personal contract purchase (PCP) and personal contract hire (PCH). PCP, the type of lease that came under fire in the investigation, [allows you to put a down payment on your vehicle at the end](https://www.financedigest.com/some-in-shanghai-allowed-out-to-shop-end-of-covid-lockdown-in-sight.html "Some in Shanghai allowed out to shop; end of COVID lockdown in sight") of the contract, meaning you can effectively purchase the car once your lease has run out. The option to purchase a vehicle at the end of the contract makes PCP an attractive option initially. However, [research suggests](https://www.financedigest.com/new-research-suggests-over-13-million-brits-were-inadequately-managed-while-working-remotely-2.html "NEW RESEARCH SUGGESTS OVER 13 MILLION BRITS WERE INADEQUATELY MANAGED WHILE WORKING REMOTELY*") that only 1 in 5 people actually choose to purchase their car at the end of a PCP \[1\]. With monthly repayments often significantly higher than those on a PCH agreement, consider whether [you’re really going to want the same car](https://www.financedigest.com/ten-things-youre-doing-that-are-invalidating-your-car-insurance.html "TEN THINGS YOU’RE DOING THAT ARE INVALIDATING YOUR CAR INSURANCE") after your contract has run out, or if you’re more likely to want to upgrade to a newer model. If it’s the latter, personal contract hire (PCH) could be a better option, this allows you to pay monthly for a car, and [return it at the end](https://www.financedigest.com/return-to-normal-uk-pm-johnson-outlines-end-to-englands-virus-restrictions.html "Return to normal? UK PM Johnson outlines end to England’s virus restrictions") of your contract. As well as offering lower monthly payments (since you’re not paying off the interest of the sizeable final payment of a PCP), many agreements come with full maintenance agreements in place, meaning you don’t have to [worry about costly](https://www.financedigest.com/fortum-says-rising-costs-of-nordic-power-trading-are-worrying.html "Fortum says rising costs of Nordic power trading are “worrying”") bills at the garage. Be aware that you will have to agree the length of the lease and your mileage before you sign the dotted line, although some providers will allow you to amend your mileage during your contract, so check if this is an option with your contract. **Think about what you can realistically afford** Before taking out any leasing agreement it is important to work out if you can realistically afford the repayments. That flash new model might look the [part but if it’s going to stretch you too much then it might be better to choose a more affordable vehicle](https://www.financedigest.com/rheinmetall-wins-quarter-billion-euro-order-for-e-vehicle-parts.html "Rheinmetall wins quarter-billion euro order for e-vehicle parts"). Similarly, consider what you want at the end of the contact and be realistic. Will you have enough cash at the [end of the lease to put a down payment](https://www.financedigest.com/does-softpos-signal-the-end-of-payment-hardware-as-we-know-it.html "Does SoftPOS signal the end of payment hardware as we know it?") on your vehicle? If not, you should [consider whether a personal contract hire agreement could get you a better deal](https://www.financedigest.com/eu-considers-more-funds-for-eastern-states-in-bid-for-deal-on-russia-oil-ban.html "EU considers more funds for eastern states in bid for deal on Russia oil ban"). **Shop through an independent** Once you have done your [research on the leasing options available](https://www.financedigest.com/lyme-disease-treatment-market-forecast-to-2031-made-available-by-top-research-firm.html "Lyme Disease Treatment Market Forecast to 2031 Made Available by Top Research Firm"), it can be a good idea to go through an independent leasing company rather than directly to a dealership. Going independent [means you’re likely to get less pressure from salesmen working](https://www.financedigest.com/redefining-what-it-means-to-have-it-all-how-to-make-work-fit-into-your-life.html "Redefining What It Means to Have It All: How to Make Work Fit into Your Life") on commission, and won’t be pushed towards any particular models they have been tasked with promoting. Independent leasing companies are specialists trained in motor finance. With a wide range of models and types of leasing contracts available, they can [offer expert advice and may be able to recommend](https://www.financedigest.com/germanys-slm-recommends-shareholders-accept-nikon-takeover-offer.html "Germany’s SLM recommends shareholders accept Nikon takeover offer") a car and contract that’s better suited to you. **Go through a reputable company** Whether you go independent or directly to a dealer, it is [important to choose a company](https://www.financedigest.com/australian-state-balks-at-energy-companys-request-for-help-with-lng-import-terminal.html "Australian state balks at energy company’s request for help with LNG import terminal") which is authorised and regulated by The Financial Conduct Authority (FCA). The FCA only endorses responsible lenders and states that companies should ‘Treat Customers Fairly’. Reputable companies will be looking to safeguard customers rather than make a quick sale with a deal that isn’t right for their circumstances, so it’s [worth doing your research](https://www.financedigest.com/industrial-hearables-market-worth-us-991-5-mn-by-2026-comprehensive-research-report-by-fmi.html "Industrial Hearables Market worth US$ 991.5 Mn by 2026- Comprehensive Research Report by FMI") to make sure you pick a company which adheres to the FCA’s guidelines. For more information about how to lease a vehicle and the options available, go to: http://www.ukcarline.co.uk/page/car-leasing-guide --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---