Personal Contract Hire (PCH)

Using Personal Contract Hire (PCH) is much like renting a car - you simply pay for what you use with a PCH.

The initial deposit is very small or non-existent, and you pay monthly instalments that usually include servicing and maintenance, and often cover depreciation. PCH is very popular with users that are opting out of their company car and taking a monthly allowance as it gives access to more cars and avoids big company car tax bills.

These payments are generally less than with a PCP or Hire Purchase.

Sounds ideal, but remember you'll never own the car and these schemes are not widely available. Also, private users cannot claim back the VAT.