Personal Contract Purchase (PCP) Overview

This is a popular way to finance a car. Here's how it works:

• Deposit: You pay an upfront deposit (usually around 10% of the car’s price).
• Monthly Payments: You make lower monthly payments compared to traditional loans, because you're only paying off part of the car’s value.
• Balloon Payment: At the end of the contract, you can either pay a lump sum (called a balloon payment) to own the car, return it, or start a new PCP deal on another vehicle.

It’s like leasing with the option to buy, and it’s especially popular for getting access to newer or more expensive cars without a huge upfront cost.

50/50 Finance (50-50) Overview

This is a hire purchase agreement with one payment of 50% of the vehicle upfront and another payment of 50% of the vehicle 2 years from the inception date of the agreement. Generally, this type of finance agreement is a manufacturer special offer and works in the same way as Hire Purchase but has a particular defined structure.

Personal Contract Hire (PCH) Overview

Personal Contract Hire (PCH) is a type of car leasing that works like a long-term rental for private individuals. It’s ideal if you want to drive a new car without the commitment of ownership.
How PCH Works

• You choose a car, set your contract length (usually 2–4 years), and agree on an annual mileage limit.
• You make an initial payment (often 3–12 months’ worth of rental), followed by fixed monthly payments.
• At the end of the contract, you return the car — no need to worry about selling or depreciation.

Benefits

• Lower monthly costs compared to buying.
• No worries about resale value or depreciation.
• Option to include maintenance packages for servicing and repairs.
• Drive a brand-new car every few years.

Things to Consider

• No option to buy the car at the end—if you want ownership, look into PCP (Personal Contract Purchase) instead.
• You’re tied into a fixed term — early termination can be costly.
• Mileage limits apply—exceeding them leads to extra charges.
• You must return the car in good condition — excess wear and tear may incur fees.

In short, PCH is perfect if you want a shiny new car with predictable costs and no long-term commitment.

Business Contract Hire (BCH) Overview

Business Contract Hire (BCH) is a popular vehicle leasing option for companies that want access to new cars or vans without the hassle of ownership. Think of it as a long-term rental tailored for business needs.
How It Works

• Your business leases a vehicle for a fixed period—typically 2 to 4 years.
• You pay monthly rentals based on the car’s value, contract length, and mileage allowance.
• At the end of the term, you return the vehicle—no need to worry about selling or depreciation.

Who It's For

• Sole traders, partnerships, and limited companies.
• Especially useful for businesses running fleets of vehicles or wanting predictable costs.

Benefits

• Fixed monthly costs make budgeting easier.
• VAT advantages: VAT-registered businesses can reclaim up to 50% on car rentals and 100% on van rentals and maintenance.
• No ownership risks—you avoid depreciation and resale headaches.
• Option to include maintenance packages for a hassle-free experience.

Things to Watch Out For

• Mileage limits apply—exceeding them can lead to extra charges.
• You’re responsible for fair wear and tear; anything beyond that may cost you.
• You don’t own the vehicle, so there's no option to buy it at the end.

It’s ideal if you want a modern fleet, lower upfront costs, and minimal admin.