How to Find the Best Personal Contract Hire (PCH) Deals in 3 Simple Steps

When you’re looking for a new car, nothing is simple. You’ve got to compare dozens of manufacturers, hundreds of models and thousands of trims. What about optional extras? And service packs? And insurance? And road tax?

With so much to think, a lot of customers just don’t shop around when it’s time to actually find a deal. They find a local car dealer, showroom or leasing broker and just jump in feet first.

Well, we don't think that's the way to do it. We think there's three simple steps you should take to help you find the best personal contract hire deal. And here they are.

Find the Perfect Car

You can’t find the best leasing deal if you don’t know what car you’re looking to lease. I get that it sounds super obvious but so many people try and jump straight to finding the best deal without sitting down and working out what car they want.

We’ve got a couple articles for motorists looking to switch cars. My favourite is 7 Awesome Car Leasing Tips to Help You Find the Perfect Car which should hopefully set you on the right track.

If you don’t have time to read the whole thing, here’s a super brief overview.

  • Remember why you’re switching. Think about what’s wrong with your current car — space, reliability, speed, pulling power, comfort and so on — and make sure your new car actually improves on those points.
  • Work out your budget. We’ve got a bit on budgets and costs coming up in the next section so I’ll keep this brief. But make sure you can afford the upfront initial payment and monthly rental payments.
  • Pick a body style. Picking out your favourite body styles is a great way to narrow down your choices.
  • Check the running costs. Even leased cars will have ongoing running costs like petrol and insurance. A quick back-of-the-envelope calculation should give you a rough idea of what it’ll take to run your car for a year.
  • Make a shortlist. You can’t research leasing contract costs for dozens of cars so you’ve got to whittle your options down to three or four cars.
  • Go for a test drive. Find a nearby garage and take each of your shortlisted cars for a test drive. Make sure you drive it like you would in real life too.

Okay, now you know what car or cars you're looking for, it's time to jump to the next step...

Understand the Charges

If you’re new to the world of leasing, it can be incredibly difficult to work out what’s going on. Leasing brokers will reel off numbers and charges and other technicalities, leaving you scratching your head and struggling to work out what's going on.

To help you understand the ins and outs of leasing deals, here’s a quick rundown of all the main charges you’ll see.

Initial Rental

The initial rental is basically a deposit but brokers can’t call it a deposit because you’re not buying the car. Like a deposit, it’s a big chunk of money you pay at the start of your deal.

With car leasing, your initial rental is calculated as a multiple of your monthly rental fee. So, you either pay three, six, nine or 12 months in one go.

The more you pay for your initial rental, the lower your monthly payments will be. Check out these two quotes we got for the same Ford Fiesta on LeaseFetcher.

Unlike Hire Purchase and PCP, where a larger deposit might mean a lower interest rate, it's worth pointing out that you always pay the same total amount over the course of your lease. It's just a matter of deciding if you want to pay more upfront and less over the monthly payments or less upfront and more over the monthly payments.

Monthly Payment

Your monthly payment is — surprise, surprise — the payment you make each month to keep driving the car.

Your monthly payment can range from under £100 for a super basic Dacia Sandero all the way up to £2,000 for an Aston Martin DB11

Most mainstream cars, however, fall in the £150 to £400 per month category.

Also, since your payments are based on the depreciation of a car and not the value of the car, you can often find that more expensive (but slower depreciating) cars are cheaper to lease than less expensive (but faster depreciating) cars.

Check out our comparison of the Mini Cooper (slow depreciation) to the Alfa Romeo Mito (fast depreciation). All prices are for personal contract hire deals over 48-months with a nine-month initial rental and 5,000 miles.

As you can see, the Alfa costs a fair bit more to lease despite costing a fair whack less to buy outright.

Yes, it’s strange but it’s just a result of how leasing pricing works.

So, don’t start your search for a new car with any preconceived ideas about what you can and can’t afford.

Document Fee

The document fee (also called a processing fee, admin fee or a whole host of other things) is basically an administrative fee charged by leasing brokers. We always ask our partners for their document fee and include this in our Total Price calculation to save you a nasty surprise down the line.

Document fees are usually around £100 to £200 so doesn’t add too much to the cost of your lease. However, it’s useful to remember that you have to pay it upfront along with your initial rental so make sure you have enough cash available.

Extra Fees

Car leasing is often sold as stress-free fixed-price motoring. Right from day one, you know exactly how much you’ll have to spend and when you’ll need to pay it.

Well, not quite.

There are a few extra charges that can sting you at the end of your contract. The two most common ones are excess mileage and damage.

The excess mileage charge is fairly self-explanatory. If you say you are going to drive 5,000 miles but actually drive 10,000, the car is worth slightly less so you’ve got to make up the difference.

Charges are usually around 5-10p per mile but some finance companies charge much more.

And then there are damage charges, which are a bit more complicated.

Finance companies expect some wear and tear like small dents (as long as they are up to 25mm, there are no more than two per panel and the paint surface isn’t broken) and tyre wear (as long as they are still legal). This normal wear and tear is actually built into their depreciation calculations.

However, if you’ve damaged the car beyond the limits of fair wear and tear, you’ll have to pay to get it fixed. This is stuff like cracked wing mirrors, larger scrapes, torn fabric and so on. Depending on how much damage you’ve accumulated, this can get expensive.

Compare, Compare, Compare

Picked your car? Check. Understand leasing deals? Check.

Great! It’s time to see what the leasing market has to offer.

And for that, you’ve got two options.

First, pick out the 50 top leasing brokers in the country, contact them all individually, write down their quotations and then compare it manually.

Yes, this is crazy but it’s genuinely what you had to do if you wanted a lease last year. Thankfully, there’s a better option now.

Second, you can jump on LeaseFetcher and instantly access pricing from the UK’s leading leasing brokers.

Just select your car, tell us about the type of lease you want and we’ll automatically show you the best leasing offers available.