Car Insurance for Personal Contract Hire Cars: What You Need to Know

Personal Contract Hire (PCH) is becoming an increasingly popular way for people to lease a car. With PCH, you essentially rent a car for a fixed period of time, typically between 2-4 years, paying a fixed monthly fee. At the end of the contract, you simply return the car and can start a new agreement for a different vehicle if you wish.

One common question people have when leasing a car through PCH is about car insurance. After all, you don`t technically own the vehicle, so how does car insurance work? Let`s take a look.

Types of Car Insurance

When you lease a car through PCH, you`ll need to have car insurance just like you would if you owned the vehicle outright. There are three main types of car insurance:

1. Third-party only – This is the minimum legal requirement in the UK and covers damage or injury to other people or their property. It will not cover any damage to your own car.

2. Third-party, fire and theft – This covers damage or injury to other people or their property, as well as damage caused by fire or theft of your car.

3. Comprehensive – This is the most extensive cover, and includes everything in third-party, fire and theft, as well as damage to your own car.

Which type of car insurance you choose will depend on your individual needs and budget.

Insuring a PCH Vehicle

When leasing a car through PCH, the lease agreement will typically state that you must have comprehensive car insurance. This is because the leasing company wants to protect their investment in the vehicle, and comprehensive cover will provide the most protection against damage or loss.

You`ll need to find an insurance policy that covers PCH vehicles specifically. Some insurers may offer specific PCH policies, while others may require you to add the leasing company as a named driver on the policy.

It`s important to shop around and compare policies to ensure you`re getting the best deal. Some leasing companies may offer their own insurance policies, but these may not always be the best value.

Things to Consider

When choosing a car insurance policy for a PCH vehicle, there are a few things to consider:

1. Excess – The excess is the amount you`ll need to pay towards any claim. Some PCH insurance policies may have a higher excess, so make sure you`re comfortable with the amount.

2. Mileage – Most PCH agreements will have a mileage limit, and you`ll need to make sure your insurance policy covers this limit.

3. GAP insurance – GAP insurance covers the difference between the value of your car and the amount you owe on the lease if your car is written off or stolen. Some PCH insurance policies may include GAP insurance, but others may require you to purchase it separately.

In conclusion, when leasing a car through Personal Contract Hire, you`ll need to have comprehensive car insurance that covers PCH vehicles. It`s important to shop around and compare policies to ensure you`re getting the best deal and that the policy covers any specific requirements set by the leasing company. By doing your research and choosing the right policy, you can enjoy your PCH vehicle with peace of mind.

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