Vehicle leasing questions, answered

Vehicle leasing, also known as Personal Contract Hire (PCH) or Business Contract Hire (BCH), is a long-term rental agreement. You pay a monthly fee to drive a brand new vehicle for a set period (usually 2-4 years) and return it at the end of the contract.

The initial rental is an upfront payment made at the start of your lease. It is usually calculated as a multiple of your monthly rental (e.g., 3, 6, or 9 months upfront). A higher initial rental reduces your monthly payments.

Maintenance is optional. You can choose a "funder-maintained" package which includes servicing, tyres, and repairs for an additional monthly cost. Otherwise, you are responsible for servicing the vehicle according to manufacturer guidelines.

Yes, Personal Contract Hire (PCH) is designed for individuals. Prices are typically quoted including VAT.

Businesses can typically reclaim 50% of the VAT on the monthly rental (100% if used solely for business) and 100% of the VAT on maintenance packages. Lease payments can also be offset against corporation tax.

BIK is a tax on employees who receive benefits (like a company car) in addition to their salary. The amount depends on the vehicles CO2 emissions and P11D value. EVs currently have very low BIK rates (2%).

Charging costs vary. Home charging is cheapest (approx. 7p-10p per mile), while public rapid chargers are more expensive. Many businesses offer free workplace charging.

Yes, all leases have an agreed annual mileage limit. Exceeding this will incur an excess mileage charge at the end of the contract.