Head to head
Leasing vs Buying: Which Is Cheaper?
Rent the car forever or own it — leasing versus buying compared on the true cost.
Leasing has the lower monthly cost, but buying — outright or on finance — is usually cheaper over the long run because you end up owning an asset.
Leasing keeps the monthly payment low, but buying the car usually costs less over the long run because you end up owning it. Leasing is an ongoing rental; buying turns payments into an asset you can keep or sell.
If you always want a newer car and predictable costs, leasing fits. If you keep cars for years, buying almost always wins on total cost.
Leasing vs buying at a glance
Leasing means paying forever for use; buying means paying until you own the car outright. Over many years, owning costs less because the payments end.
A lease never ends in ownership — the moment you stop paying, you have no car. Buying, whether outright or with HP or a loan, ends with the car yours and the payments gone.
| Leasing (PCH) | Buying (cash or finance) | |
|---|---|---|
| Monthly | Lower | Higher (or none, if cash) |
| Long-run cost | Never stops | Stops once paid off |
| Own the car? | No, ever | Yes |
| Mileage limits? | Yes | None |
| Best for | Always new, fixed budget | Keeping it long, lowest total |
Worked example: leasing vs buying over the long run
Buy a £20,000 car on HP and you pay about £452 a month for 48 months, then nothing — and you own it. Lease the equivalent and the payments never stop.
Leasing can still make sense if you value a new car every few years and a fixed, all-in budget. But on pure total cost, owning a car you keep is hard to beat. Check the buying side on the HP or car loan calculator and the renting side on the leasing calculator.
Worked example
Who each option suits
Lease if you always want a newer car and tidy monthly costs; buy if you keep cars long and want the lowest total.
- Lease (PCH) if: you change car every 2–4 years, want a predictable monthly, and don't mind never owning.
- Buy if: you keep cars for years, drive high or variable mileage, or want to stop paying once it's yours.
- Buying cash avoids interest entirely — but compare the true cost against a 0% or low-rate deal first.
Work out your own numbers
Compare the lease monthly against the cost to buy and own — over the years you'll keep the car.
Run buying on the HP calculator or car loan calculator and leasing on the leasing calculator, then weigh each on true APR and interest. See it all on the car finance calculator.
Frequently asked
Is it cheaper to lease or buy a car?
Do you own the car if you lease it?
When does leasing make more sense than buying?
Does leasing have mileage limits?
Work out your next step
Independent calculators — pick the one that fits your situation.