Sorry for the late reply.... Been on nights.
So yeah a PCP is kind of like the hire purchase of old. The difference is that you have three options at the end of the deal, Keep it, trade it for another or give it back and walk away. At the start when setting it all up all financial stuff is set out and you pay a deposit then however many years of monthly with a pre-agreed final balloon payment if you want to keep the car. Mileage is also agreed and can be tweaked as required (Ours by default was 24,000 miles total but we changed it to 32,000 miles). Vehicle condition & mileage is taken into account but only if you are giving it back and walking away or trading it and starting a new deal.
Our Colour Edition was something like £16,000 new, There was £3,000 deposit paid between us and VWFS (We paid £1,000 and VWFS paid £2,000) then what's remaining is paid at an agreed amount per month plus a final larger balloon payment if you want to keep the car. The monthly & final payment can be tweaked slightly as if you were definitely going to keep it you could pay a little more per month and have a smaller final payment or if you intended to give it back you could tweak it slightly to make your monthly payments slightly smaller leaving a larger final payment etc....
So in our case ours was £3,000 deposit, £198 per month for 47 months, and a final payment of £5300 for the 48th payment.
The problem pre-COVOD was that the car usually reached the point of neutral equity at around the 3 year mark so pretty much everyone except those who were planning on giving it back and walking away at the end tended to end up finishing the deal up to a year early and switching to a new vehicle or they would end up paying a final payment that was more than the market value of the car. For example with the Citigo that this Fabia replaced in 2019 it was approaching the point of negative equity at a month short of 3 years even though it was either a three and a half year or four year deal and hence the wife traded it in for the Fabia.
Post COVOD though with used car prices being a lot higher it means the car has depreciated a lot less and so the final payment is actually a lot less than the market value. This is great if you intended to walk away as you could pay the final payment then just put the car straight on the market and maybe double the money you just paid as the final payment.
In our case we will have paid around £15,600 over the last four years (£15,600 rather than the new price of £16,000 as VWFS paid £2,000 of the deposit but there has been around £1,600 paid in interest over the four years) and we have a car that is currently selling for around £11,000-£12,000 on a forecourt looking at others available that are 19 plates with the same spec and mileage.
From what myself and friends have found the differences between PCP and leasing are the final options where PCP gives the added benefit of the option of keeping the vehicle and the lease deal sometimes getting the benefit of things like running costs like tyres and servicing included in the deal.
Also PCP is usually also now available as an option for used cars at dealers rather than just on new cars as it used to be so the same process can be used when buying an approved used car as well.