Lease

You never own the car, just lease it over a fixed term then hand the car back.

You can usually include maintenance costs in the monthly payments, so you don't have to worry about servicing or MOTs.

This can sometimes be cheaper than a PCP but not always, it can be difficult to get out of a lease early, you may have to pay an early termination fee.

Example

Here's an example of a lease agreement for a BMW 4 Series Gran Coupe:

Over 48 months, 10,000 miles, 3 payments up front of £1,966.14 (plus admin fee) then 47 payments of £655.38.

Additional miles are charged at 5p per mile.

Pros

  • Can include all maintenance costs
  • Usually cheaper than buying

Cons

  • You never own the car
  • Hard to exit the agreement early
  • Cannot modify the car