Can I Swap From a Personal Contract Hire Agreement to a Business Contract Hire Agreement Mid-Term?

PCH and BCH agreements explained by Clear Car Leasing

Personal Contract Hire (PCH) and Business Contract Hire (BCH) are two types of car leasing options available to those over the age of 18 and who hold a full valid UK driving licence.

They are both very similar – you lease a brand new car/van for an agreed term, pay a initial deposit followed by a fixed monthly rental, choose the best annual mileage allowance that suits your needs and return the car when your contract comes to an end.

With a PCH agreement, an initial deposit (non-refundable) is paid at the start of your agreement, followed by fixed monthly payments for the duration of your lease term. Basically, the larger the deposit you put down at the start, the smaller your monthly payments will be, however it is entirely up to each individual customer how much of a deposit they want to make.

A BCH agreement is purely for businesses large or small who would like to lease a vehicle/s through their business and benefit from money saved by being able to claim back at least half of the VAT, so long as your business is VAT registered – if your lease a commercial vehicle you could claim back 100% of the VAT. If you add a maintenance package to your agreement and you’re business is VAT registered, 100% of its VAT can be claimed back also.

Can I Swap From a Personal Contract Hire Agreement to a Business Contract Hire Agreement Mid-Term?

If you’re already mid-way through a PCH agreement, maybe because your business was relatively new when you first leased the car but since then your business has grown, you can ask if it’s possible to swap over from a PCH agreement to a BCH agreement mid-term.

It might be that the original contract must be settled before the swap-over can take place and the settlement figure could be between 50% to 100% of any outstanding monthly rental payments but this all depends on your finance provider.

With regards to the vehicle/s for both personal contract hire and business contract hire, they belong to the finance provider for the duration of your lease term, who will also be the registered keeper of the vehicle/s.

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