There are a number of reasons why it can be much more affordable to lease a car other than to purchase it through a PCP plan.  The first factor is the purchase price.  If you select a car lease then the vehicle will be purchased by and then registered to the finance company.  Often the finance company will have enhanced terms in place with the manufacturer directly.  The Dealer will then discount the vehicle further in order for them to supply volume to that particular funder.  If you were to purchase that exact vehicle directly, as an individual no matter what deal you negotiate with the Dealer you will not be entitled to fleet discount and wouldn’t be able to purchase the vehicle for the same price.  Secondly, contract hire rentals are calculated based on the purchase price and the residual value at the end of the contract, the amount your rental is based on, is the amount in between,  A PCP agreement does set a guaranteed future payment but this is usually conservative.  Lastly, as the vehicle is registered to the leasing company, that company are able to use the write down rule in terms of a depreciating asset, any savings that they make can be included in the overall lease deal.