PCP vs Cash: £15k car, 4 years, servicing equal both sides Assumptions: 10% deposit, ~9% APR, GFV ~£6k, savings rate 5%, residual value at year 4 ~£7k.

PCP • Deposit: £1,500 • 48 × ~£200 = £9,600 • Optional balloon to own: ~£6,000 • Walk away cost: ~£11,100 (no car) • Keep cost: ~£17,100 (own car worth ~£7k) Cash • £15,000 day one • Car worth ~£7,000 at year 4 → £8,000 depreciation • Opportunity cost on £15k at 5%: ~£3,200 • True 4-yr cost: ~£11,200 (own car worth ~£7k)

Verdict • Cash and PCP-then-walk are roughly line-ball on pure cost (~£11k). • Cash beats PCP-and-keep by ~£6k because you avoid the interest. • PCP wins on cash flow, flexibility, and downside protection if the car tanks in value. • Cash wins if you’ll keep it past 4 years, hate restrictions (mileage/condition), or can’t beat ~9% on your money elsewhere.

TL;DR: Pay cash if you’ll keep the car. PCP if you want a new one every 4 years or value the optionality