Lease (PCH) = rent a new car, hand it back at the end. No deposit (small initial rental), no balloon, no ownership, usually the lowest monthly. PCP = a finance deal to buy: deposit (10–30%), low monthly, then choose at the end to pay the balloon and own, hand back, or use any equity on the next car. Choose a lease if you just want to use a new car for the lowest fuss and cost and will never keep it. Choose PCP if you want the option to own or to build equity. Both have mileage limits and 5–10c/km excess. Want to own outright instead? See lease vs buy.
Lease vs PCP at a glance
| Feature | Personal Lease (PCH) | PCP |
|---|---|---|
| What it is | Long-term rental | Finance agreement to buy |
| Ownership at end | No — return car | Optional — pay the balloon |
| Upfront | Nil or small initial rental | 10–30% deposit |
| Balloon / GMFV | None | Yes, deferred to the end |
| Monthly cost | Usually lowest | Low, but deposit + balloon apply |
| Equity at end | None | Possible (if value > balloon) |
| Mileage limit | Yes — 5–10c/km excess | Yes — also protects the balloon |
| Maintenance | Often an add-on | Not included |
| Modifications | Not allowed | Allowed (tell insurer) |
| Best for | Lowest-fuss use of a new car | Optional ownership / equity |
How each works
Personal lease (PCH)
You agree a term and mileage, pay a small initial rental, then a fixed monthly figure for the term. At the end you return the car in fair-wear-and-tear condition and walk away. There is nothing to pay off and nothing to sell. See our PCH guide for the full mechanics.
PCP
You pay a deposit, then lower monthly payments that are kept down by deferring a large final balloon (the Guaranteed Minimum Future Value, set at the start). At the end you have three choices: pay the balloon and own the car; hand it back and walk away; or trade in — if the car is worth more than the balloon, that equity becomes your deposit on the next PCP. Our car finance guide covers PCP, HP and credit-union loans in full.
Monthly cost and deposit
The headline monthly figures can look similar, but the structure differs. A lease finances only the depreciation over your term, so the monthly is usually the lowest and the upfront is just a small initial rental. PCP keeps the monthly low by parking a big balloon at the end, but typically needs a 10–30% deposit to start. Always compare the total you will pay — deposit/initial rental + monthly × term (+ balloon if you keep a PCP car) — not the monthly alone.
Manufacturer PCP promotions sometimes advertise very low or 0% APR but offset it with a higher car price or a low balloon that inflates the monthly. Read the total amount payable and the GMFV, not just the rate.
Ownership and equity
This is the core difference. A lease never makes you the owner — you are renting. PCP gives you a route to ownership (pay the balloon) and the chance of equity: if the car's market value beats the balloon at the end, the surplus is yours to roll into the next car. That equity is not guaranteed — in a soft used-car market it can vanish — but in recent strong markets many drivers have carried thousands forward. If you value the possibility of ownership or equity, PCP wins; if you just want to use the car, the lease is simpler.
Mileage and flexibility
Both cap your annual mileage and charge 5–10c/km over it. On PCP, mileage also affects your balloon and therefore your equity — a high-mileage car is worth less than the GMFV assumed. Both are firm for the term with costly early exit. PCP offers slightly more end-of-term flexibility (keep, return, or trade) where a lease has one path: hand back.
Total cost — worked examples
Illustrative only — real figures depend on the car, deal and used-car market. Both based on a €35,000 mid-size car over 36 months / 15,000 km a year.
| Cost element | Lease (PCH) | PCP (hand back) | PCP (keep car) |
|---|---|---|---|
| Upfront | ~€1,400 (4-mo initial) | ~€3,500 (10% deposit) | ~€3,500 (10% deposit) |
| Monthly × 36 | ~€450 → €16,200 | ~€420 → €15,120 | ~€420 → €15,120 |
| Balloon (GMFV) | None | Not paid (return) | ~€15,000 paid |
| Own the car at end? | No | No | Yes (~€18k+ asset) |
| Cash out over 3 yrs | ~€17,600 | ~€18,600 | ~€33,600 (but you own it) |
The takeaway: to simply use the car for three years and hand it back, the lease is usually a touch cheaper and needs less upfront. PCP costs a little more to hand back, but gives you the option to own (pay the balloon) or to capture equity if the car beats its GMFV. To compare either against buying and keeping a car long-term, see lease vs buy.
Which suits you
Choose a lease (PCH) if:
- You want the lowest monthly and smallest upfront to use a new car.
- You will definitely hand the car back and never want to own it.
- You value a predictable all-in cost with maintenance bundled.
Choose PCP if:
- You want the option to own the car at the end.
- You want a shot at equity to roll into your next car.
- You might modify the car or are unsure whether you'll keep it.
Lease or PCP — odo.ie tracks the mileage and service history that protect your deal.
Both lease and PCP penalise excess mileage, and PCP equity depends on keeping the car in good, well-serviced condition. odo.ie tracks your accurate km against the allowance and keeps a complete service record, plus tax and insurance reminders. Solo is free for 1 vehicle; Family €4/month for 3; Pro €8/month for 10. No ads, EU data residency.