Can I build equity with a lease?

No. With contract hire (PCH/BCH) you pay for use and return the car at the end. If equity or ownership matters, consider PCP/HP or buying outright.

Which is better for electric cars?

Leasing is popular for EVs because it avoids long-term technology and residual value risk and pairs well with salary sacrifice due to low BIK.

Can leasing include maintenance and tyres?

Yes. Many leasing agreements offer service, maintenance and tyres as an add-on so you can keep motoring costs predictable.

Leasing vs Buying — Full UK Cost Comparison

Q: Is leasing cheaper than buying?

For drivers who prefer a new car every 2–4 years and want fixed costs, leasing often proves cheaper overall. If you keep cars 7–10+ years, buying can win, but you carry depreciation and repair risk.

Updated October 2025 | Reading time: 9 minutes

Should you lease or buy your next car? This guide compares the true total cost of ownership (TCO) in the UK — across upfront costs, monthly payments, maintenance, tax and depreciation — and then shows which route typically wins for different drivers.

Short on time? Jump to: At-a-glance comparison, Real-world scenarios, Pros & cons, FAQs.

How the Costs Work (UK)

Upfront outlay — Leasing: an initial rental (e.g., 3–9 months of the monthly) vs Buying: a deposit (often 10%+ on PCP/HP or full cash if buying outright).
Monthly payments — Leasing: fixed rentals for use only. Buying: finance repayments or none if cash.
Maintenance — can be included with leasing (service & maintenance packs). With buying, you pay as you go.
Tax & incentives — company drivers may prefer salary sacrifice or low BIK on EVs.
Depreciation — baked into lease pricing; if you buy, you take resale risk.
End of term — Leasing: hand back (no resale hassle). Buying: part-exchange/sell to release equity (if any).

New to leasing? Start with Car Leasing Explained.

Leasing vs Buying: At-a-Glance

Cost Area	Leasing (PCH/BCH)	Buying (Cash/PCP/HP)
Upfront Cost	Lower (initial rental)	Higher (deposit or full cash)
Monthly Outgoings	Fixed; usage only	Finance varies; ownership focus
Maintenance	Can be included in fixed price	Pay as you go
Depreciation Risk	Funder’s risk (priced in)	Buyer’s risk
End of Term	Hand back; no resale	Sell/part-exchange; possible equity
Flexibility to Upgrade	High (every 2–4 years)	Depends on finance & market

Real-World Scenarios

1) Low Upfront Budget, Predictable Costs

Leasing tends to win. Lower initial outlay and fixed monthly rentals with optional maintenance included. Perfect if you value simplicity and budget certainty.

See today’s Car Leasing Special Offers or In-Stock Deals.

2) High Annual Mileage (Motorway Commuter)

Either route can work. Leasing supports higher mileage contracts (price adjusts accordingly). Buying may suit if you plan to keep the car long-term and accept resale variability.

3) Like to Drive the Latest Tech (2–4 Year Cycle)

Leasing usually wins. Easy upgrade path, especially for fast-moving EV tech. Consider Electric Cars Explained.

4) Want Long-Term Ownership (7–10+ Years)

Buying can win. If you keep cars for a decade and maintain them well, spreading the cost over many years can beat a sequence of leases — but you carry depreciation and repair risks.

5) Company Driver / Employee Benefit

Leasing via salary sacrifice is often most cost-effective for EVs due to low BIK. Explore Salary Sacrifice Car Leasing and Employer Schemes.

Pros & Cons

Leasing (PCH/BCH)

✔ Lower upfront cost and fixed monthly budgeting
✔ No resale hassle; simply hand back
✔ Option to include service, tyres and breakdown
✔ Regular upgrades keep you in-warranty
• Mileage/condition rules apply; early termination can incur charges

Buying (Cash/PCP/HP)

✔ Ownership potential (PCP optional final payment / HP on completion / cash outright)
✔ No mileage limitations from a funder
✔ Flexibility to modify/use without agreement constraints
• Higher upfront cost; depreciation and resale risk on you
• Maintenance and unexpected repairs not fixed-price by default

Related reading: Buying vs Leasing a Car and Car Leasing vs Buying.

The EV Angle (2025)

Leasing: competitive pricing on popular EVs; avoids long-term tech risk; great fit with salary sacrifice.
Buying: you carry future value risk; may still work if you keep cars for many years.

New to EVs? Start here: Electric Cars Explained and compare our Electric Leasing Deals.

Next Steps

View Special Offers (updated frequently)
Browse by Manufacturer
Apply for Finance (Personal) | Apply for Finance (Business)
Speak to a Leasing Expert for a personalised TCO comparison

Frequently Asked Questions

Is leasing cheaper than buying?

For drivers who like a new car every 2–4 years and want fixed costs, leasing often works out cheaper overall. If you keep cars 7–10+ years, buying can win over time.

Can I build equity with leasing?

No. Contract hire (PCH/BCH) is usage-based — you hand the car back. If equity/ownership matters, consider PCP/HP or buying outright.

What about maintenance and tyres?

Leasing can include service, maintenance and tyres in one monthly figure. Buying usually means paying as you go.

Which is better for EVs?

Leasing is popular for EVs because it removes long-term tech/depreciation risk and pairs well with salary sacrifice.

Conclusion

If you value lower upfront costs, predictable monthly budgeting and frequent upgrades, leasing is usually the smarter route. If you drive low miles and plan to keep a car for many years, buying can still make sense — especially with robust residuals and careful maintenance. Not sure? We’ll run the numbers with you.

Compare Leasing vs Buying with Silverstone