Cheap Car Leasing: Best Deals For 2021

What is a PCH lease and is it right for me?

To give it its full and explanatory title, a Personal Contract Hire is another name for a lease agreement, which means it is a long-term loan or hire of a vehicle rather than a purchase.

The term Personal Contract Hire has come into common use as it sits alongside PCP (Personal Contract Purchase) on dealer forecourts.

Traditionally leasing was only available to businesses, but the market for personal leasing has boomed, so there are plenty of deals available.

PCH suits people who don’t want to be tied into the ownership of a car, want to be able to change cars regularly and are happy to potentially pay a small premium to do so.

If you have zero interest in owning a vehicle then PCH makes sense, but if you are undecided and want to keep the option of returning the vehicle over buying it, a PCP gives you that flexibilty. Ultimately your decision should be based on doing your calculations, working out what you can afford and what your needs are.

Leasing a car - how does it work?

The basics of PCH are similar in some ways to that of a PCP. For PCH you typically have to pay a deposit which can be anywhere between three and 12 times the monthly rental fee.

As with most financial arrangements, the larger the deposit, the lower the monthly price. You can also choose the period of the PCH, which depends on the individual provider, but can be anything from one to four years. You also need to decide upon your annual mileage, and once again this will have an effect on the monthly cost.

The terms of the agreement will stipulate the period of the loan and an agreed mileage, and at the end of the period you will return the car.

Because a PCH is a hire agreement, the vehicle will be inspected upon its return to ensure it is within the guidelines for fair wear and tear and within the agreed mileage limits. If the car falls outside of these you will have to pay penalty fees, which could add up to a significant amount.

At the end of the agreement, you can walk away or start a new agreement with a new car. Road tax is normally included for the duration of the hire and a maintenance contract can also be included, so you can be sure of your budget for the period and only have the additional cost of fuel to worry about.

Best Leasing companies

Here's the lowdown on the best leasing companies to consider if you're looking to lease a car.

All Car LeasingAll _car _leasing _banner (2)

All Car Leasing is a Cheshire-based leasing broker with more than 20 years of experience within its team, and is a part of the Eurocar Group.

It offers cars and vans for business and personal leasing, as well as long-term rental for periods up to and beyond 90 days. It supplies vehicles from a wide range of manufacturers, including premium brands such as Audi, Mercedes and BMW. It can also source high performance cars for leasing 

Find lease deals from All Car Leasing

Blue Chili CarsLogo (2)

Blue Chili Cars is a UK-based broker in operation since 2007, with a combined experience of over 20 years in the vehicle leasing and sales industry.

It offer cars and vans for both business and private individuals, whether for hire purchase, lease purchase, PCP or PCH. It works with major leasing companies such as Leasplan UK and Lex Autolease.

Find leasing deals from Blue Chili Cars

Hippo LeasingHippo -leasing -logo -small

Involved in the motor trade since the 1960s, Hippo Leasing has been a franchisee for Land Rover, BMW and MINI. In 2013 it moved to a £2m purpose-built location in Blackburn to accommodate a large stock of vehicles.

Hippo offers personal and business leasing on vans, cars and used vehicles, as well as offering deals for customers with poor credit and even no-deposit leasing deals.

Find leasing deals from Hippo Leasing

Established in 2019, is one of the newer players on the leasing market but has actually been around since 2003 under the name DSG Auto Contracts. It works with all the big leasing firms such as Leaseplan, Lex Autolease and Santander.

The firm also offers fully maintained short term vehicle agreements from three to 23 months, which are available on a variety of vehicles with stock rotating daily. It has a 4.8 rating on TrustPilot with 95 per cent of users rating the company as excellent.

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Leasing.comDownload (1) (1) has been around since 2000 and offers a wide range of both cars and vans, claiming to have the 'widest choice of deals in the UK by working with franchised dealers, independent brokers, manufacturers and leasing companies.

Based in Stockport, the firm offers personal and business leasing with 6 million leasing offers available on its website.

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MoneyshakeMoneyshake -logo .25132a2

One of the newer companies around, Moneyshake is a car leasing comparison website which allows customers to quickly find the best personal and business car leasing deals from the UK’s top providers.

Established in 2019, Moneyshake has an expert team that is on hand to guide users through the leasing process to ensure they get the best lease deal. Based in Staffordshire, Moneyshake has coverage across all major manufacturers and models by partnering with leading franchised dealers and leasing brokers.

It has a 4.8 rating on Trustpilot with 88 per cent of customers rating it excellent.

Find leasing deals from Moneyshake

Nationwide Vehicle Contracts Nationwide -vehicle -contracts -logo -500-500-300x 85

One of the largest leasing companies in the UK, Nationwide Vehicle Contracts has been operating since 2002, offering both cars and vans to private and business customers.

It can deliver nationwide and provides brand new cars from UK dealers. It works with some of the biggest finance companies such as ALD, Arval, Lex Autolease, Hitachi Capital and Leaseplan.

Find leasing deals from Nationwide Vehicle Contracts

Select Car Leasing Logo (1) (1)

A UK based company first established in 2004, Select Car Leasing supplies both cars and vans but deals only in leasing for private individuals and business users.

Select Car Leasing frequently offer deals through their website and also have a dedicated team available 9am to 7pm Monday to Friday and 10am until 4pm Saturdays.

Find leasing deals from Select Car Leasing

What are the pros and cons of leasing?

If you like the idea of being able to change your car regularly then a PCH holds a lot of appeal. Some companies can offer leases of 12 months, so you could change your car as frequently as once a year.

A PCH also makes it easy to budget, as only changes in the interest rate can affect the cost of your monthly payment and you don’t have to worry about sudden maintenance bills with a service contract. You are also unaffected by depreciation, as you are unaffected by the value of the vehicle at the end of the term.

One of the main drawbacks of a PCH is that because you will not own the car at any point, straying outside the agreed terms for mileage and condition at the end of the term will mean financial penalties, which could add up to a significant sum.

You are also tied into the contract for the duration, so if you decide to end the agreement for any reason you will most likely have to pay a fee to do so. Finally, a PCH may be more expensive than a competitive hire purchase agreement, so you may end up paying more to hire a car than if you had bought it outright.

1Do I need my own insurance for a lease car?

Do I need my own insurance for a lease car?

You need to insure a lease car yourself, even though it is not owned by you during the hire period. Although you are not paying to take ownership of the car, it is in your custody and is essentially your responsibility for the duration, which means the vehicle insurance is paid for by you.

The finance company will have their own policies to cover a loss on the vehicle but this does not cover your use of it.

What happens if my PCH lease car is damaged in an accident?

If there is vehicle damage it is recommended that you contact your vehicle insurance company to notify them. Even if you pay for the repair of any damage yourself it is important to be covered in case another party makes a claim against you.

A crucial difference with a lease vehicle is that the leasing company will want any repairs to be carried out by a repair specialist approved by them, and a failure to do so may cause you significant problems. If repairs are required it is recommended that you put your insurance company in touch with the leasing company so that they can communicate with each other.

2Who is the registered keeper of a lease car?

Who is the registered keeper of a lease car?

If you have a PCH then the registered keeper, and legal owner, of the car is the finance company responsible for providing the lease. In simple terms the finance house has purchased the car and is hiring it to you, so their name is the one that appears on all the important paperwork.

This is important, because when you arrange your car insurance it is crucial that you inform your provider that you are not the legal owner or registered keeper. Tthis may also have a negative effect on your premium, so be sure to shop around.

Another factor to keep in mind is that any parking tickets or speeding fines that are generated may be sent to the registered keeper, and how this is then delt with depends on the individual company, so be sure to read the small print. Some leasing companies will pay the fine as soon as it arrives and then invoice you, with an administration fee added on top.

3What happens if a leased car is written off?

What happens if my PCH lease car is written off?

If the vehicle is declared as a total loss by your insurance company then you are liable for the value of the car at the time of it being written off.

This is because the leasing company do not have insurance to cover the loss of the vehicle. While it is in your custody during the loan period you are required to insure the car, so a total loss means you are required to cover that loss.

The payout from your insurance company will cover some or all of the total amount outstanding, but in the event that it is less this amount you will be liable for the difference. In these circumstances GAP insurance would cover you for this difference, so it is something you may wish to consider before taking up a PCH lease.

4What happens if my PCH lease car is damaged in an accident?

What happens if my PCH lease car is damaged in an accident?

If there is vehicle damage it is recommended that you contact your vehicle insurance company to notify them. Even if you pay for the repair of any damage yourself it is important to be covered in case another party makes a claim against you.

A crucial difference with a lease vehicle is that the leasing company will want any repairs to be carried out by a repair specialist approved by them, and a failure to do so may cause you significant problems. If repairs are required it is recommended that you put your insurance company in touch with the leasing company so that they can communicate with each other.

5What happens at the end of a PCH?

What happens at the end of a PCH Lease?

Unlike a PCP where there is the option to buy the vehicle at the end of the term, a PCH is strictly a lease, and so there is no option to buy.

At the end of the term the vehicle is returned to the leasing company for resale, and therefore it has to meet the mileage and condition criteria that were given at the start of the agreement. Failure to meet these criteria will mean paying additional penalties.

6Can you end a PCH early?

It is possible to end a PCH early, but because of the way in which lease cars are funded it is not simply a case of returning the vehicle and walking away.

If you are having financial difficulties and struggling to meet your monthly payments, your first course of action should be to contacting the leasing company and explain the situation. They may be able to assist you by re-arranging the terms of your agreement and lowering your monthly payment.

If this option is not available or you are determined to end the agreement early, what happens next depends on the leasing company and the terms of your agreement, but you will be liable for a proportion of the remaining monthly hire costs - anything from 50 per cent to 100 per cent.

This process is called early termination, and individual leasing companies will have different ways of calculating the early termination fee as well as determining your eligibility.

The reason for this is because the vast majority of lease vehicles are purchased by the finance provider in order to provide the vehicle for your use, and your monthly payment is calculated on the calculated cost of the vehicle use and its depreciation during the hire period.

Unless the vehicle can be sold at a price which clears the remaining finance and more, the leasing company will lose money on the deal - hence the result is usually a requirement for you to pay early termination fees.

7Can you buy a car at the end of a PCH lease?

Can you buy the car at the end of a PCH?

The short answer is a simple no. The ‘hire’ part of the PCH is the crucial element here - this is a hire agreement only, and the monthly payment is calculated solely on the basis that the car will be returned in a saleable condition at the end of the period.

Even if it happens to be the best car you have ever driven, no amount of begging or pleading will allow you to buy it.

If you are super-keen you may be able to find out where the car will be re-sold, as the lease company is likely to have an established sell-on route for vehicles that come to the end of their lease period, but there are no guarantees this information will be available.

What are the differences between PCH and PCP?

PCH stands for Personal Contract Hire and in some respects it is similar to a PCP. You pay a deposit and have a fixed monthly payment over the length of the agreement.

However, at the end of the agreement, there are no options - the vehicle must be returned. You can still walk away completely or start a new agreement, but you cannot purchase the vehicle. It is a leased vehicle - you are not purchasing it.

PCH gives you the ability to change your car frequently. Some providers offer agreements of 12 months or less, so you can swap into a different car on a regular basis if that appeals.

Choosing PCH also takes away many of the hassles of car ownership, particularly if you take up an agreement that includes a maintenance package. That means you will not have to pay for servicing or road tax, which can also help if having a fixed monthly cost is important to you.

As with a PCP, a PCH will come with restrictions over the mileage you can cover as well as a commitment to keep the vehicle within fair wear and tear guidelines. As this is a rental rather than a deal with the option to purchase, failure to abide by these restrictions will result in an additional cost to you.

A PCH deal will also have a clause that requires you to pay an exit fee if you choose to end the agreement early, and it may also cost you more than a competitive Hire Purchase deal depending on your term.

Will I need a credit check to lease a car?

Yes. Like a loan or credit card application, a PCH requires a credit check. Because you don't own the car, any lease company will need to ensure that you can make the monthly payments over the term of the agreement.

Be wary of brokers or leasing companies that claim they can lease a car without a credit check - it's very likely they are not reputable. There are however, companies that will still lease you a car if you have a poor credit rating.

>> Read more on credit checks

Ask HJ

Can I renew a lease at the end of the agreement, give it back or buy the car?

We have a Hyundai Kona, which is shortly coming to the end of a three-year lease. It was brand new and top of the range when we got it and it's done less than 15,000 miles. We like the car, although at times we wish it was a bit bigger and higher off the ground. Should we try to renew the lease for one or two years, give the car back at the end of the three years or buy it and keep it until we trade it in for another car? Your thoughts would be appreciated. Alternatively, if we did give it back, what medium-sized and medium-priced SUV would you suggest? It would need to be relatively comfortable driving down our rough road. We also don't want a Skoda.
Usually, the leasing company would expect you to return the car at the end of the agreement – although some will offer the chance to extend it. They might be more willing to do this as you've not covered many miles. You won't be given the chance to buy it outright, unless it's a PCP finance agreement (rather than a lease). Consider a Citroen C5 Aircross as its replacement, or a Peugeot 3008.
Answered by Andrew Brady
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Ask HJ

What happens to a PCP or PCH agreement if the car owner dies?

What normally happens in the event of the incapacity or death of someone who has taken out a PCP or PCH agreement? Can it be transferred to a spouse? Also, is a deceased person's estate liable for any fees payable on early termination? Thanks.
That's not an easy question to answer as it depends on the type of finance and the way you went about getting it, hypothetically. If you have a personal contract purchase (PCP), hire purchase (HP), personal loan or any other kind of borrowing to finance your car, that debt remains payable even in the event of your death. A lease is different because you aren't borrowing any money and are simply renting the car. A car leasing agreement will have early termination penalties that apply to ending a lease early. If you have a guarantor, they will become responsible for the finance agreement, just as they would if you were unable to make your monthly payments. If you took out a joint agreement then the other person becomes fully responsible for paying off the debt. In most other cases, your debt will become part of your overall estate after your death. If you have a will, your nominated executor is responsible for managing your financial affairs, including your car finance debt. If you do not have a will, an administrator will be appointed – usually a next of kin. For whoever is in charge of the estate, the process for settling the debt will become part of managing all the expenses of the estate — just like your mortgage and other debts. If they want to keep the car, this can usually be arranged if they agree to take over the contract and payments.
Answered by Georgia Petrie
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