The art of the deal

A PCP can be the best way to get a new car on the drive, but what's available for a budget of just £100 per week? JOHN EVANS shops around for a deal

- JOHN EVANS

More than 30 years since Ford launched the UK's first personal contract purchase scheme, PCPs are today the leading form of new car motor finance among private buyers. Affordable (you fund only a portion of the car's list price), flexible (at the end of the repayment term, you can part-exchange the car for a new one, pay the balance to buy the car or return it) and widely available (pretty much every dealer offers them), a PCP kicks all other forms of personal new-car finance into touch. Factor in sweeteners such as low-rate finance and manufacturer deposit contributions (abbreviated here to 'dc') and it's a no contest.

Of course, a PCP comes with strings, such as condition and mileage penalties, but unless you're handing the car back to the dealer at the end of the term and walking away, they're rarely imposed. Instead, most people either part-exchange their car or sell it to a trader who pays off the finance as well as returning them some extra cash - what the trade calls equity.

Of course, wise heads would say the smarter thing still is to buy nearly new and avoid expensive new car depreciation. Perhaps, except that, thanks to the manufacturer finance offers some are bundled with, a new car on a PCP may actually be better value - and almost certainly so if you can chisel a discount or a free servicing package. In any case, the latest model-year always brings useful improvements or upgrades that make a car more satisfying to run.