The car leasing vs buying used UK debate gets rehashed endlessly, but most of what you’ll read either reads like a lease broker’s brochure or a used car dealer’s pitch. I want to try something different: actual numbers, realistic scenarios, and an honest look at where each option bites you in ways you didn’t expect when you signed on the dotted line.
The short version? Neither option is universally cheaper. The one that works out better depends almost entirely on how you use a car, how long you want to keep it, and how much you hate financial surprises. Let me walk through the specifics.
How the numbers stack up at the start
Take a realistic example. A three-year-old Ford Puma with around 30,000 miles on it will cost you somewhere between £14,000 and £17,000 to buy outright in 2026, depending on spec and service history. A brand-new Puma on a three-year personal contract hire (PCH) deal, at 10,000 miles per year, might run you around £280-£320 per month with a typical initial payment of three months upfront. That’s roughly £11,500-£12,000 over the term, not including any maintenance package.
On paper, leasing looks cheaper by a few grand. But that ignores what happens at the end of three years with the used car you bought: you still own something worth money. A Puma bought today for £15,000 might be worth £8,000-£9,000 in three years if it’s been sensibly kept. That’s a £6,000-£7,000 depreciation hit. The lease deal? You’ve paid £12,000 and you own nothing. The numbers are already closer than people think.
Depreciation is not your enemy if you buy right
The classic argument for leasing is that you dodge depreciation. That’s true with a new car, where the sharpest drop happens in the first two or three years. But buying a used car that’s already taken that hit is a completely different calculation. If you buy a three-year-old car, someone else has already eaten the worst of the depreciation curve. You’re buying at a point where the value loss per year has slowed considerably.
The used car buyer’s real risk is buying the wrong car. A model with poor reliability, an approaching major service, or hidden structural issues can turn a sensible purchase into a money pit fast. This is where a full service history genuinely matters, not just as a negotiating chip but as evidence that the car has been maintained to a standard that means you’re not walking into a repair bill in month four.
What maintenance packages on a lease actually cost you
Most lease companies will sell you a maintenance package alongside the PCH deal. These typically cover scheduled servicing, tyres, and sometimes brakes. For a medium-sized family car, you might pay an extra £50-£80 per month for a full maintenance package. That’s another £1,800-£2,880 over a three-year term. Suddenly that lease deal that looked lean is costing closer to £15,000 all-in, before the initial rental.
And here’s the thing: if you skip the maintenance package on a lease, you’re still responsible for servicing the car to the manufacturer’s schedule. Miss a service or use a non-approved garage and you might face charges when you hand the car back. If you do buy the package, you’re paying a premium for convenience that a competent independent garage could undercut significantly. The Right to Repair legislation means you’re not obligated to use main dealers for a car you own, but on a lease you’re playing by the lease company’s rules.
Mileage limits are where leasing bites hardest
PCH contracts are priced around a fixed annual mileage. Standard deals tend to offer 8,000, 10,000, or 15,000 miles per year. The excess mileage charge when you go over? Typically 5p to 12p per mile depending on the car and the contract. That doesn’t sound like much until you’ve done 3,000 miles over in a year, at which point you’re looking at £150-£360 extra at handback. Do that across three years and you’ve added £450-£1,080 to the total cost of the lease with zero benefit to you.
Used car buyers don’t have this problem. Drive 20,000 miles in a year because work sent you up and down the country? Your car takes the mileage hit in value, but there’s no bill landing on your doormat. That flexibility is genuinely valuable and consistently underestimated by people running the headline monthly cost comparison.
The Which? guide to PCH is useful here for understanding what contract terms you’re actually agreeing to before you sign, because the small print on excess mileage, condition charges, and early termination fees is where the real cost of a lease lives.
Early exit: where leasing becomes genuinely expensive
Life changes. Job redundancy, a growing family, a new city, a medical condition that changes what you need from a car. With a used car you own, you sell it. Simple. You take whatever the market offers and move on.
With a PCH deal, exiting early is brutal. Most contracts allow early termination but charge you 50% of remaining rentals as a minimum. If you’re 18 months into a 36-month contract paying £300 per month, that’s potentially £2,700 in termination fees. The car is handed back and you leave with nothing except a significant bill. I’ve seen drivers trapped in lease contracts through genuine hardship because the exit cost made it unaffordable to leave. That’s a risk the monthly comparison never shows you.
Condition charges at handback
Beyond mileage, lease companies assess the car’s condition when you return it. The British Vehicle Rental and Leasing Association (BVRLA) has a Fair Wear and Tear guide that sets out what’s acceptable. Anything outside those standards, a scuff on a bumper, a small tear in the seat fabric, a chip in the windscreen, can attract charges. These are often £100-£400 per item. Families with children, dogs, or anyone who uses their car as an actual car rather than a showroom piece should price this risk into the equation.
With your own used car, a stone chip is just a stone chip. You fix it if you care about it, ignore it if you don’t. Nobody sends you an invoice.
So which actually works out cheaper?
If you do low mileage, want a new car every three years, never go over the limit, keep it immaculate, and wouldn’t dream of needing to exit early, leasing works out very competitively. The all-in cost over three years, even with a maintenance package, can land close to what you’d pay in depreciation on a used car plus running costs.
But if you drive more than 12,000 miles a year, if your circumstances might change, or if you want the flexibility to sell up and buy something different in 18 months’ time, used car ownership is considerably cheaper across almost every real-world scenario. The asset value you retain matters. The absence of penalty clauses matters. The ability to choose your own garage matters.
My honest take: leasing suits a specific driver profile and it’s not the majority. Most people who’d be better off buying a solid used car get drawn into a lease by the low monthly number on the advert, without ever running the full three-year total. Do that maths before you commit. It’s rarely as clear-cut as the lease broker makes it look.
Frequently Asked Questions
Is car leasing cheaper than buying a used car in the UK?
Not necessarily. Leasing can look cheaper on a monthly basis, but once you factor in initial payments, maintenance packages, mileage penalties, and condition charges at handback, the total cost over three years often matches or exceeds what you’d spend buying and running a comparable used car. The used car also retains resale value, which leasing does not.
What happens if I go over my mileage limit on a PCH deal?
Excess mileage charges on personal contract hire deals typically run from 5p to 12p per mile over your agreed limit. If you exceed your allowance by 3,000 miles a year, that can mean an unexpected bill of £150 to £360 per year at handback, with no benefit to you whatsoever.
Can I end a car lease early in the UK?
Yes, but it’s expensive. Most PCH contracts charge around 50% of remaining rental payments as an early termination fee. If you have 18 months left on a £300-per-month deal, that could mean paying £2,700 to exit. Selling a car you own outright has no equivalent penalty.
What condition does a leased car need to be in when I return it?
Lease companies assess returned vehicles against the BVRLA Fair Wear and Tear guide. Anything considered beyond normal use, including scuffs, chips, or interior damage, can attract charges typically ranging from £100 to £400 per item. Drivers with children, pets, or heavy daily use should factor this risk into the total cost.
Is it better to lease or buy a used car if I drive more than 15,000 miles a year?
Buying a used car is almost always better value for high-mileage drivers. Leasing contracts priced at higher mileage allowances cost significantly more per month, and excess charges apply if you still go over. Owning a used car means the only mileage penalty is slightly lower resale value, which is far more predictable and manageable.