Contract Hire (PCH) Calculator

Estimate a contract hire rental — depreciation plus funding cost, scaled by term and mileage. Personal (incl. VAT) or business (ex-VAT).

Optional — tyres, servicing and breakdown cover

Result

Estimated residual£12,750.00 (43%)
Monthly rental (est. range)£728.40 – £826.82
Initial rental (6 × monthly)£4,370.40 – £4,960.95
Total contract cost£26,222.40 – £29,765.70
Effective cost per mile£0.87 – £0.99/mile

How it's calculated

  1. 1

    Residual estimate = 43% of £30,000.00 for a 36-month / 10,000-mile-pa profile = £12,750.00

  2. 2

    Depreciation = (£30,000.00 − residual) ÷ 36 months — £462.50–£495.83/mo

  3. 3

    Funding charge ≈ average capital (£30,000.00 + residual) ÷ 2 × 8–11% APR ÷ 12

  4. 4

    Monthly rental ≈ £607.00–£689.02 ex-VAT → £728.40–£826.82 incl. 20% VAT

  5. 5

    Initial rental = 6 × monthly = £4,370.40–£4,960.95

  6. 6

    Total cost = monthly × 36 = £26,222.40–£29,765.70 over 10,000/pa × 3yr = 30,000 miles

Contract Hire (PCH) Calculator — FAQs

What's the difference between PCH and PCP?

PCH (personal contract hire) is pure rental — fixed monthly payments, then you hand the car back with no option to buy. PCP is finance towards optional ownership: monthly payments are similar but a balloon (GFV) sits at the end which you can pay to keep the car. PCH monthly rentals are often slightly lower since nothing builds towards ownership.

What are excess mileage charges?

Exceed your contracted mileage and you pay a per-mile penalty — typically 5–15p + VAT per mile depending on the car. Set an honest mileage upfront: a higher mileage allowance raises the monthly rental but is usually cheaper than the excess charges.

Can businesses reclaim VAT on contract hire?

VAT-registered businesses can reclaim 50% of the VAT on the rental for cars also available for private use, and 100% of the VAT on a separately identified maintenance charge. Cars used solely for business (e.g. pool cars) can reclaim 100%. Toggle 'Business — ex-VAT' above to see pre-VAT rentals.

Can I end a contract hire agreement early?

Yes, but there's no statutory right like PCP/HP voluntary termination — early termination fees are set by the funder, commonly around 50% of remaining rentals (sometimes more in the first year). Check the early termination terms before signing.

Is contract hire cheaper than buying?

Monthly rentals are usually lower than loan or HP payments because you only pay for the car's depreciation plus funding, never the full value. Over many years, buying and keeping a car long-term is typically cheaper overall — leasing wins on fixed costs, warranty cover and a new car every 2–4 years.

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