PCP, PCH or loan?

OK, this is always a bit of a minefield. For what it's worth, I'll give you my thoughts.

It depends an awful lot on what sort of mileage you're doing. If you do higher than average, then the typical PCP plans can start to work out expensive.

My personal view, as someone who does a lot of miles and is not a car snob ( i.e. it's a tool to get me from A to B and back again ), is that I'd go for the personal loan route. You buy a reasonable second-hand car, pay off the loan over 3 years, you then own the car. You're not too worried about keeping it in pristine condition, for fear of paying expensive costs when you return it. You own the car after 3 ( or whatever ) years, can then either keep or sell it as you choose. And if you're sensible about servicing and looking after it, there's no reason it shouldn't last for many more years after that, giving a much lower overall cost of "motoring-per-year", as it were.

PCP plans do have advantages - commonly servicing etc. is included, so it makes it easy to budget. But to my mind, why pay all that money for something you'll never own ? I guess it's akin to the option of buying or renting a house. Buy a house, you end up with something of value, but you're lumbered with repair costs. Renting is a simpler option, but you don't end up owning anything. OK, a house will generally appreciate in value whilst a car will depreciate ... but you get my drift.

I guess a big factor is how long you expect to keep a car. If you want a shiny new car every 3 years, then PCP can be a good option. If you prefer to buy a decent 3-year-old car and run it for as long as possible, then a loan ( or savings !! ) is the more sensible route. I always tend to do this - my current car was bought at 4 years old, is now 12 years old, and touch wood is still going strong. I've had no nasty surprises, just routine servicing ( which I do myself ) and "expected" wear-and-tear items. If it dies tomorrow it owes me nothing - though I hope it goes on for many more years yet !