this relatively new product is very similar to a lease purchase.

however, the final lump sum payment (balloon or residual) is guaranteed.

this offers you a protection against any losses on the value of the vehicle over the term.

using a pcp agreement gives you 3 choices at the end of the period.

• pay the outstanding balance and keep the vehicle
• part exchange the vehicle and use the remainder of the money after paying the balance to put down as a deposit on your new car.
• hand the vehicle back and walk away.

with this type of agreement you can add a maintenance agreement which for an added cost will cover you for servicing and fair wear and tear on tyres and exhausts.