Personal Contract Plans have become very popular in recent years, where you're effectively just funding the depreciation on your new car. Unless you buy the car at the end of the contract, you never get to own it.

• As with hire purchase, you pay a deposit and monthly instalments; the difference is that the monthly payments are generally lower.
  
• PCPs are popular with ex-company car drivers as many schemes include servicing and maintenance in the price.
  
• There's a final payment called the minimum guaranteed future value (MGFV), also known as a balloon payment. This is usually 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.
  
• There's usually a mileage limit, which can't be exceeded without the payment of a stiff penalty at the end of the contract.
  

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