Best new car deals: 15 top offers chosen for you

Many drivers use the car’s ‘equity’ as the deposit on their next one. This ‘equity’ is made up of overpayments you may have made, since makers often overestimate how much a new car will depreciate to play it safe. This quirk of PCPs means you might not necessarily have to find a big deposit each time you take out a new deal.

If you don’t want to own the car outright or roll any ‘equity’ into a new deal, your third option is to hand the car back with no additional payments, and walk away.

Few buyers have the means or motivation to spend tens of thousands of pounds in one go. So while PCP deals are the most popular finance option, retailers also have an alternative, called Personal Contract Hire (PCH).

Also known as personal leasing, PCH deals require less capital up front. After an ‘initial rental’ or up-front payment, you make a series of regular payments until the agreement ends, after which you hand back the car and walk away.

While there’s no large deposit, unlike a PCP, which offers a reasonable degree of flexibility, a PCH will tie you in for the duration, with no option of handing the car back early without a financial penalty.

Fewer people choose Hire Purchase these days, but it’s still possible to take out an old-fashioned HP agreement on a new car.