Personal contract hire (PCH) is growing says leasing company Hitachi Capital Vehicle Solutions.
Hitachi’s car leasing brokers are putting 40% of small business owners into PCH rather than a Personal Contract Purchase (PCP) or contract hire deal.
“A PCH is easy to understand. It’s much more straightforward than a PCP deal,” commented Peter Leyden, head of SME sales, Hitachi.
A PCH is usually agreed over three years. It involves a monthly lease that’s inclusive of VAT. At the end of the three-year period the car returns to the leasing company.
Drivers that use a PCH-funded car for work can reclaim business mileage by using AMAPs. AMAPs, or Approved Mileage Allowance Payments, are 45p per mile for the first 10,000 business miles. They are tax-free.
For small business owners and sole traders that don’t wish to run a car through the company books, a PCH is a viable alternative.
“Small business owners realise that they can now drive aspirational cars through a PCH lease,” said Leyden. “They realise they can get into an Audi rather than a Mondeo.”
Leyden said PCH deals supplied through car leasing brokers was one of three ways Hitachi was supporting the small business sector.
“Otherwise small businesses can come through our telesales route or direct to us,” said Leyden.
“‘We’re doing more consultation now as well. Explaining the effects of tax on choice and the benefits of choosing a business car with lower CO2,” Leyden added.
Further information
- For more on PCH leases read What is a personal lease?
