Personal lease vs buy used: the honest UK cost comparison
Personal leasing looks expensive on the monthly headline, but the maths against buying a 3-year-old used car is closer than most people think.
By Dean Griffiths · Published
The setup that everyone compares wrong
Comparing a £279/month lease on a new car to a £15,000 cash purchase isn't the right comparison. The right comparison is: total of all payments over three years on the lease, vs (purchase price minus expected resale price plus running costs not included in the lease) on the buy. Once you frame it that way, the gap narrows hard.
Three-year worked example
C-segment family hatch, equivalent specs.
- Lease: £2,500 deposit + 36 × £279 = £12,544 total. Includes manufacturer warranty for the full term. Maintenance package usually optional (+£20-£40/month).
- Buy used (3-year-old at £15,000, sold 3 years later at £8,500): £6,500 depreciation. Plus £900 servicing across three years, £600 VED, £450 unexpected wear items. Net 3-year cost: £8,450.
- Buy net advantage: ~£4,000 — IF you achieve the resale value (which depends on condition, mileage, market).
Where lease quietly wins
Three real benefits buying-side maths usually ignores. One: every car under lease is under full manufacturer warranty for the entire term — zero unexpected repair bills. Two: BIK savings — if you're using it as part of a salary-sacrifice EV scheme, the income tax saving can flip the comparison entirely. Three: lifestyle predictability — fixed monthly cost, no resale risk, no DIY car-selling negotiation at the end.
Where buying wins
You keep the car beyond the three-year window — the buy gap widens by ~£1,500/year of additional ownership while the lease ends. You're confident in your ability to maintain and not crash the car. You'd otherwise pay over the lease mileage cap (6–12p/mile excess fees). You have £3k+ liquid to put down without it hurting.
The mileage trap on leases
Lease quotes are priced against a mileage cap — typically 5,000, 8,000 or 10,000 miles a year. Most quotes you see are at the lower end. Going 30% over your real annual mileage at the lease end costs 8–12p per mile excess — that's £1,800–£3,000 surprise at hand-back. Always quote the lease at your honest annual mileage, not what fits the headline payment.
The takeaway
Buy used if you'll genuinely keep the car 4+ years and won't blow the mileage cap. Lease if you want a new car every 3 years, value the warranty, and won't hit the mileage excess. The £4,000 paper advantage for buying often shrinks to break-even once real-world risks are priced in.
Frequently asked questions
Frequently asked questions
What's the difference between PCH and PCP?
PCH (Personal Contract Hire) is a true lease — you never own the car. PCP (Personal Contract Purchase) is buying with a deferred final balloon payment; you can keep the car at the end. PCH is generally cheaper monthly, PCP keeps the option to buy.
Is leasing an EV cheaper than buying one?
Often yes, through manufacturer subsidies (especially on stock cars they need to shift) and salary-sacrifice schemes that cut income tax. A new EV at £450/month on PCH can equate to ~£280/month after salary-sacrifice tax savings.
Can I exit a lease early?
Yes but it's expensive — early termination fees are typically 50% of remaining payments or more. Some leases have a 'half-rule' allowing exit after half the term for the cost of half the total. Read the contract before you sign.
Related guides
- The PCP trap: how to tell if a used-car finance deal is actually goodA low monthly PCP payment is designed to be attractive. Here's how to check whether the total cost is actually in your favour — or the dealer's.
- PCP vs HP: which used-car finance deal is actually betterPCP and HP look similar on paper but produce very different total costs. Here's how to choose — and the trap most buyers fall into.
- First-time buyer's guide to choosing your first used carThe right first car is not the fun one — it's the one that doesn't cost you your second car. Here's how to pick well for under £6,000.
Used cars on finance you can buy right now
PCP, HP and personal lease from verified UK dealers. Every car DVLA-checked.
