How is contract hire different to PCP

One major difference is that PCP finance gives you the option of being able to purchase the van at the end of your agreement.

But in both cases, you’ll decide the length of term you would like the van for and how many miles you’ll drive over the lease term. You'll make an initial payment at the beginning of the agreement, and then ongoing monthly payments are made thereafter.

Contract hire differs from a PCP with the options available to you at the end of the agreement.

With a PCP you have the choice of paying a balloon payment at the end of the term and owning the car outright. Although this choice may seem more appealing than contract hire, you could end up paying more for PCP due to the interest accrued on the full value of the vehicle, whereas with van leasing you’re only paying for the depreciation of the vehicle.  

Unlike PCP, if you choose to lease your vehicle there is no option to buy the van when the agreement comes to an end.

You will essentially be hiring your van for a set period of time and then returning it at the end of your term. The benefit of this method is that the leasing company is responsible for taxing the vehicle so you will not have this yearly outlay.

Most people who choose PCP opt-out of buying their van at the end of their contract agreement. If this is likely to be you, then choosing contract hire will probably work out cheaper.