PCP is a car finance agreement with monthly payments and an optional final payment if you want to keep the car.
PCP can lower monthly payments, but you need to understand mileage terms, condition rules and the final balloon payment.
You usually pay a deposit, monthly payments and then choose what to do at the end.
The final payment is often called the balloon payment.
You can return the car, pay the balloon to keep it, or sometimes part-exchange it.
Your equity depends on the car value compared with the balloon payment.
If you return it, the balloon payment is not paid, but condition and mileage rules matter.
If you keep it, the balloon payment needs to be included in the full cost.
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Include it if you expect to buy and keep the car at the end of the agreement.
