It's a straightforward effect of financialisation. It's because you get the benefit of the part exchange value of the car in three years time now, rather than

It's a straightforward effect of financialisation. It's because you get the benefit of the part exchange value of the car in three years time now, rather than in three years time. That simple discounted present value trick allows you to have a nicer car the first time you get on a PCP plan, because it lowers the total amount of credit on that plan vs the alternative.