As with hire purchase, you pay a deposit and monthly instalments.
The difference is the monthly payments are generally lower, which means you can afford a flasher car than you might have thought possible.
Popular with ex-company car drivers as many schemes include servicing and maintenance in the price.
However, there is a final payment called the minimum guaranteed future value (MGFV), also known as a balloon payment.
This is often a large sum, which means you either have to stump up to buy the car outright, walk away with nothing, or swap to another PCP scheme to keep you on the road.
