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Drivers can often pay “more than double” to secure PCP deals with motorists set to save an average of £7,150, according to LeaseLoco. Experts at the firm reveal drivers can save more than £5,000 on a brand new Ford Focus while over £6,000 can be saved on a top of the range Mercedes A-Class.
The luxury sports car costs £12,783 on a PCP finance deal compared to just £6,264 if drivers choose to lease the cars.
One of the biggest differences between the two finance options will be seen by prospective buyers of the Volkswagen T-Roc.
LeaseLoco says drivers can save a total of £9,664 by sticking with a lease contract at a major discount as the UK heads into recession.
John Wilmot, CEO of LeaseLoco said PCP deals may “seem like an attractive proposition” but drivers will find leasing is “almost always cheaper”.
He revealed PCP contracts could be double the offers available under a leasing contract
Speaking to Express.co.uk, he said: “Where cars historically have been considered one of the biggest purchases you’ll make in life, they can be much more affordable nowadays, provided you find the right deal.
“At face value, Personal Contract Purchase (PCP) deals can seem like an attractive proposition to get a car on manageable monthly payments, but leasing is actually almost always cheaper.
“In leasing, it’s not uncommon for £40k list price cars to be as little as £300 per month with no deposit, when the equivalent PCP deal could be more than double that.
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“With PCP you still own the car – meaning you have depreciation worries and the possibility of negative equity throughout the term.”
Car leasing is when road users pay a monthly charge to borrow a vehicle for a specific time frame.
Vehicle leases also come with mileage restrictions with road users usually liable for any extra miles they use over their set policy.
At the end of a contract, drivers simply hand the leased car back to the manufacturer and take out a new model.
PCP deals are roughly the same although drivers have the opportunity to purchase the model at the end of their contract.
Those that decide they wish to keep their car will be liable to pay a “balloon” payment at the end of their contract to make up the difference.
PCP deals offer more flexibility when compared to leasing but costs are usually higher over the course of the contract.
PCP contracts also allow drivers to walk away from a vehicle if at least 50 percent of the contract has been paid back.
However, lease deals do not usually allow drivers to walk away from a deal meaning they will be left with the vehicle even if they no longer need one.
For those looking to lease a model, Mr Wilmot urges drivers to keep their eyes on the “volatile” market and wait until prices are at their lowest.
He recommends drivers should monitor the market for at least six months before switching vehicles to get a feel for the current market conditions.
Speaking to Express.co.uk, he said: “To get the best deal, it’s vital you track the market and available lease deals over time, as lease pricing is volatile.
“I always suggest monitoring the market for six months ahead of when you expect to change [your] vehicle, so you can get a feel for the pricing in the market and any patterns in it.”
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