With PCP you have the option to buy the car at the end of the contract by making a 'balloon payment' which is equivalent to the remaining value of the total cost of the car. This balloon payment is agreed at the beginning of the PCP contract, so if your car is worth less than expected you will be in negative equity and end up paying more than your car's real value. When you lease with PCH you don't own the car, but you do not need to worry about the car's value when the leasing agreement ends. Learn more about Car Leasing vs. PCP in our simple guide.