Head to head
PCP vs Leasing: Which Is Cheaper?
Lower monthly versus owning the option — compared on cost, ownership and flexibility.
Leasing is usually cheaper month to month, but PCP can end up cheaper overall if you keep the car, because leasing never lets you own it.
Leasing (PCH) is usually the cheaper monthly option, while PCP works out cheaper overall only if you buy the car at the end. Leasing rents the car for a fixed term; PCP gives you the option to own it by paying a final balloon.
The right choice comes down to one question: do you ever want to own the car? If never, leasing wins. If maybe, PCP keeps that door open for a higher total.
PCP vs leasing at a glance
PCP and leasing both keep the monthly low, but only PCP can end with you owning the car. Leasing is a long-term rental with no ownership at any point.
PCP keeps the monthly down by deferring a big chunk — the balloon — to the end. Leasing keeps it down by charging you only for the use, not the car. Neither builds ownership unless, on PCP, you pay that balloon.
| PCP | Leasing (PCH) | |
|---|---|---|
| Monthly | ≈ £314 | Often lower |
| Total cost | Lower if you don't buy | Fixed rental, nothing back |
| Own the car? | Optional (pay the balloon) | No, ever |
| Flexibility | Keep, hand back or part-exchange | Hand back only |
| Best for | Maybe keeping it | Always changing car |
Worked example: PCP vs leasing on the same car
On a £20,000 car over 48 months, PCP runs about £314 a month, with an £8,000 balloon to own it at the end. A lease on a similar car is often a touch lower each month, but you hand it back with nothing to show.
The fair comparison is total cost for what you get. On PCP you can sell the car later and recover some value; on a lease you cannot, because it was never yours. Work the PCP figures with the PCP calculator and the lease side with the leasing calculator.
Worked example
Who each option suits
Lease if you never want to own the car and like changing it every few years; choose PCP if you might keep it.
- Lease (PCH) if: you want the lowest predictable monthly, always drive something new, and don't care about owning.
- PCP if: you'd like the option to buy at the end, want to part-exchange any equity, or might do high mileage and prefer flexibility.
- Watch the mileage limits on both — going over costs pence per mile and can wipe out the saving.
Work out your own numbers
The cheaper option depends on your price, term and mileage — so run both. Compare the monthly and the total side by side before you sign.
Start with the PCP calculator and the leasing calculator, then check the true cost and APR of each quote. For the wider picture, see how every option stacks up on the car finance calculator.
Frequently asked
Is PCP or leasing cheaper?
Do you own the car with PCP or leasing?
What happens at the end of a PCP versus a lease?
Which has lower monthly payments, PCP or leasing?
Work out your next step
Independent calculators — pick the one that fits your situation.