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 ยท Published
The setup that everyone compares wrong
Comparing a ยฃ279/month lease on a new car to a ยฃ15,000 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: ยฃ2,500 deposit + 36 ร ยฃ279 = ยฃ12,544 total. Includes manufacturer warranty for the full term. Maintenance package usually optional (+ยฃ20-ยฃ40/month).
- Buy used (3-year-old at ยฃ15,000, sold 3 years later at ยฃ8,500): ยฃ6,500 depreciation. Plus ยฃ900 servicing across three years, ยฃ600 VED, ยฃ450 unexpected wear items. Net 3-year cost: ยฃ8,450.
- Buy net advantage: ~ยฃ4,000 โ 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 โ zero unexpected repair bills. Two: BIK savings โ 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 โ 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 โ the buy gap widens by ~ยฃ1,500/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 (6โ12p/mile excess fees). You have ยฃ3k+ liquid to put down without it hurting.
The mileage trap on leases
Lease quotes are priced against a mileage cap โ 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 8โ12p per mile excess โ that's ยฃ1,800โยฃ3,000 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 ยฃ4,000 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 โ 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 ยฃ450/month on PCH can equate to ~ยฃ280/month after salary-sacrifice tax savings.
Can I exit a lease early?
Yes but it's expensive โ 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 โ 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 โ 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 โ it's the one that doesn't cost you your second car. Here's how to pick well for under ยฃ6,000.