What Type of Personal Car Lease is the Best Option for Me?

Here, we’re taking a look at some of the main personal car leasing options available on the UK car market. This will cover leasing, personal contract purchase, personal contract hire, and a whole load more!

With leasing becoming an increasingly popular method of getting a brilliant and typically brand-new car, we thought it would be useful to take a look at the main options you have in more detail, including some of the cheapest lease deals.

Personal Contract Hire (PCH)

With this lease option, fixed monthly payments are calculated based on how much your chosen vehicle is expected to depreciate. If you’re unfamiliar with this term, depreciation basically covers the difference between the purchase price of your vehicle and its resale value at the end of your lease agreement. Generally, this will also take into consideration age and mileage. If the car you have chosen is good at holding its initial value, then your monthly payments will be lower. This makes it possible for you to lease a better model than you would have been able to purchase.


  • You can enjoy driving a new car every 2-3 years without worrying about depreciation

  • Leasing offers lower monthly bills and a smaller deposit

  • There are no surprise payments to worry about

  • Completely hassle-free, as you’ll be able to hand your car back at the end of your lease

  • If you are vat registered, you can reclaim 50% off your vat on finance payments


  • You have no option to purchase your car at the end of your lease contract

  • Comprehensive car insurance will be required

  • Exceeding your allotted mileage can be extremely costly

Personal Contract Purchase (PCP)

If you like some of the main benefits of a PCH agreement but are unhappy with the idea of handing back your car at the end of your lease, a PCP could be the perfect option for you. With this lease agreement, you will be required to put down a deposit, and then this will be followed by additional payments every month. With this option, a minimum guaranteed future value of your car is also calculated. This is sometimes referred to as a balloon payment. This is the amount you will be required to pay to take full ownership of your car once your lease agreement expires. Alternatively, you also have the option of using your current car as a part-exchange for a brand-new model.


  • Budgeting is easier with fixed monthly costs

  • Only have to worry about a small deposit and lower monthly payments

  • Huge amount of flexibility is provided courtesy of the balloon payment

  • If you decide in the end that you don’t want to buy, you can simply walk away


  • If you are considering the best method of owning your own car, this is not the most cost-efficient option

  • You will need to take out comprehensive car insurance as you are not the owner of your vehicle

  • If you go over the agreed mileage in your contract, this will incur extra costs

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