Buying vs leasing: Which is cheaper in 2024? (PCP vs PCH)

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Author: | Updated: 06 Mar 2024 15:25

If you’re looking to get behind the wheel of a brand-new car, it’s likely that you are considering several options and weighing up which will be most cost-effective for you.

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You can read about the pros and cons of the different types of finance in our guide here, but in this article we’re looking at one area specifically – cost. Which is the cheapest form of car finance? Which offers the most value for money? Which offers the cheapest monthly cost? What’s the most affordable up front?

The answer to all those questions is actually quite simple. In the vast majority of cases, leasing (personal contract hire) will win out as the most cost-effective option. But we would say that wouldn’t we?

Buy vs lease: Which offers best value?

To prove our point, we’ve taken five of the UK’s most popular cars and taken a look at how offers found on Leasing.com compare to PCP deals we found using manufactures’ finance calculators. We took monthly cost, up front cost and total cost into account, to demonstrate just how much can be saved.

It’s also worth bearing in mind the below doesn’t take into account the optional final payment option on PCP agreements; these examples are representative of the amount payable over the course of the contractual period.

We ensured we were looking at like-for-like trim levels and that all contract lengths and mileage allowances were as closely aligned as possible. Here’s the results.

Peugeot 408 – Save £5,218.29 over three years

408 lead

408 pch

The Peugeot 408 has been proving exceptionally popular on Leasing.com over the last few months. It’s got the looks, it’s got the practicality and, arguably most importantly, it’s got the attractive price tag. At the time of writing, you can actually lease one for less than £200 per month.

But we’ve not gone all-out and brought you a ridiculously low monthly cost in our example. We’ve used a more representative example that comes out at £271.19 per month.

That’s more than £100 less than you’d be paying on a monthly basis for a PCP deal we found on Peugeot’s finance site. Interestingly, the PCP deal we found was also a 0% APR offer and also featured a manufacturer deposit contribution.

All the same, a lease deal over the same three-year period could save you in excess of £5,000. It also demonstrates that sometimes, 0% APR deals aren’t all they are cracked up to be in terms of overall savings.

Peugeot 408 PCP vs lease breakdown:

Leasing.com partner PCH offer

Manufacturer PCP quotation

Monthly payment

£275.74

£389.55

Upfront payment

£2,481.66

£3,177.50

Term of finance agreement

36 months

37 months

Annual mileage allowance

10,000 miles

10,000 miles

Total cost at end of contract

£12,372.56 (inc. fees)

£17,590.85 (exc. Balloon payment)

Compare Peugeot 408 lease deals

Cupra Formentor – Save £4,761.17 over three years

formentor pcp

cupraa v2 pch

The Cupra Formentor is consistently a top performer on Leasing.com. It’s got a sporty appeal that few other crossovers can pull off. We sourced a PCP quotation from Cupra, which offered a £361.53 monthly payment over three years.

That’s more than £70 per month pricier than the same trim level will cost you over the same period if you decide to lease it. In total, that’s a saving of more than £4.5k during a three-year finance agreement.

Cupra Formentor PCP vs lease cost breakdown:

Leasing.com partner PCH offer

Manufacturer PCP quotation

Monthly payment

£320.81

£361.53

Upfront payment

£2,887.29

£6,523.25

Term of finance agreement

36 months

36 months

Annual mileage allowance

10,000 miles

10,000 miles

Total cost at end of contract

£14,415.63 (inc. fees)

£19,176.80 (exc. Balloon payment)

Compare Cupra Formentor lease deals

Tesla Model Y – Save £4,604.25 over three years

model y pcp

tesla model y

Leasing an electric vehicle offers many benefits. For starters, if you’re new to battery-powered vehicles, it’s a great way of dipping your toe in the water without committing to anything long-term.

You also avoid the steep depreciation associated with electric vehicles. Leasing one can also take the sting out of monthly payments.

Take a look at this comparison with a typical Leasing.com partner offer. Monthly savings of around £90 per month over a three-year period which, combined with a lower upfront payment, results in a total saving of £4,604.25.

Tesla Model Y PCP vs lease cost breakdown:

Leasing.com partner PCH offer

Manufacturer PCP quotation

Monthly payment

£451.14

£546 per month

Upfront payment

£2,706.84

£3,700

Term of finance agreement

36 months

36 months

Annual mileage allowance

10,000 miles

10,0000

Total cost at end of contract

£18,790.75 (inc. fees)

£23,395 (exc. balloon payment)

Compare Telsa Model Y lease deals

Volkswagen Polo – Save £711.80 over four years

polo pcp

polo pch

Lease deals often work best on more premium models that suffer from less depreciation. Despite a smaller total saving, let us show you that it can also work for longer contracts on a more affordable supermini – the Volkswagen Polo.

A favourite for new and experienced drivers alike, it’s known to offer big-car quality in a smaller package. At the time of writing, a 48-month PCP deal found on Volkswagen’s finance site is on offer for the five-door Style model at £290.91 per month.

While savings are marginal when it comes to the leasing monthly payment, the upfront deposit costs of PCP deals still make it the more affordable bet overall.

Volkswagen Polo PCP vs lease cost breakdown:

Leasing.com partner PCH offer

Manufacturer PCP quotation

Monthly payment

£290.12

£290.91

Upfront payment

£2,611.08

£3,645.74

Term of finance agreement

48 months

48 months

Annual mileage allowance

10,000 miles

10,000 miles

Total cost at end of contract

£16,606.72 (inc. fees)

£17,318.52 (exc balloon payment)

Compare Volkswagen Polo lease deals

Kia Sportage – Save £2,761.57 over four years

sportage pcp

sportage pch

The Kia Sportage is a family favourite, and another fantastic example of how leasing instead of buying can save you some cash. A quick look on Kia’s finance site and we find a deal on the ‘3’ turbo-petrol mild-hybrid model.

This will cost you £518.15 over the course of four years. The same car, with the same basic contractual terms, can be leased for £358.79.

Although the initial rental on the lease at this price (nine months) is a little over the £3,000 deposit of the PCP deal, the significantly lower monthly payment still ensures an impressive saving over the course of the contract.

Kia Sportage PCP vs lease cost breakdown:

Leasing.com partner PCH offer

Manufacturer PCP quotation

Monthly payment

£358.79

£518.15

Upfront payment

£3,229.11

£4,500

Term of finance agreement

36 months

37 months

Annual mileage allowance

10,000 miles

10,000 miles

Total cost at end of contract

£20,392.23 (inc. fees)

£23,153.40 (exc. Balloon payment)

Compare Kia Sportage lease deals

Can't see what you want?

The examples and comparisons you see above are just a small sample on some of the most popular models so far in 2024. But the same principal rings true for the majority of models.

Hit the button below to jump into our main search and find the car you’re after. Alternatively, our find my dream car tool can help narrow down your search and save you money.

Compare all lease deals

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