The OP said lease/personal contract. Perhaps I should have said when the PCP is over

Yes, often used interchangeably - didn't mean to be abrupt, was in a hurry, sorry.

A similar question came up recently on another forum and I contributed the following - might be some use.

I used to do this stuff (financial services) for a living.

PCP is usually just HP with lower regular payment and a large final one ("balloon payment"), with a buy back guarantee at the end if the customer doesn't want to make the balloon payment. The problem with just handing the car back is that you then have no car...

Dealers and manufacturers love PCP because it's easier to sell a car with a lower monthly payment, and unless the customer is going to budget for the balloon payment then it is very likely that he (or she) will be in the market for another new car in 3 years time, and captive to another new car on PCP. If they are lucky, they will have enough equity in the car to pay the next deposit, and off they go again.

One of the other benefits for dealers of selling on any form of credit is that the customer who is focused on affordable monthly payments can take his eye off the ball, the total cost. It's easier to sell an extra when it's only another tenner a month, not an extra £500 and a bit on the balloon payment that the customer has to part with.

If you can budget for the balloon payment, you could instead save money (interest) by using an ordinary loan, not PCP, other things (especially the interest rate, but possibly also discounts) being equal.

But...there are some bargains, simply because of the attraction to manufacturers of hooking people in to this form of new car addiction. They are looking at the "lifetime value" of a new customer.

So when there is over-supply, old models to get rid of, or demand tails off, rather than just trashing the prices it can make more sense to promote a discount to people buying on PCP. That's usually dressed up as a deposit contribution, a boosted buyback guarantee (=lower monthly payment) or, as with the Skoda deal, a low or zero interest rate.

A pal of mine got a stupidly good PCP deal on a Mercedes ML when the price of gas guzzlers crashed a few years ago. The monthly payments he made on a two year deal had covered about half the depreciation from the best discounted price he could have had when he just handed it back two years later.

Just look at the numbers carefully and see if it works for you. But the starting point should be to determine the best discounted price you can get, and keep checking back to that.

To which I would add - as davecooper says - you aren't actually forced to go back to the dealer you bought from and hand the car over, though they are happy to let you think so if you want to. Be wary of the interest rate if it looks low, or even zero - it could still be a poor deal if the price is too high.