A Personal Lease, also known as PCH (Personal Contract Hire), is when you want to lease a vehicle as an individual and under your name.
A Business Lease, also known as BCH (Business Contract Hire), is when the vehicle is leased for a business and not an individual person. This can work out cheaper for businesses as you can claim VAT back. Sometimes, it will be an individual's name on the lease, for example, if they are a sole trader. While other times it'll be a company name on the lease documents.
Biggest similarities
The PCH and BCH agreements work the same way, as they are the same type of lease contract. This generally includes:
- Monthly fixed rental cost
- Set number of months (12, 24, 36, 48, 60)
- Larger initial rental (a deposit)
- Mileage limit (this is broken down annually but totalled across the lease duration)
- Fair wear and tear
- Lease funder owns the vehicle. You only use it for the duration of your lease as your vehicle
Biggest differences
The way the vehicles are priced is very different.
- Personal Leases include VAT (Value Added Tax) in the advertised monthly price
- Business Leases do not include VAT in the advertised monthly price