The true cost of owning a new Peugeot 208

While the UK car market is dominated by SUVs, there’s still strong demand for hatchbacks. The Peugeot 208 is a great option – it’s a stylish small car I’d recommend thanks to its striking looks, impressive interior, and efficient hybrid engines.

But there’s more to the story than the list price. While a new Peugeot 208 looks affordable upfront, the true cost of ownership can quickly add up once you factor in fuel, tax and sometimes depreciation.

To find out what it really costs to own, I ran the numbers on a new hybrid Allure Peugeot 208 over three years and 30,000 miles to see how much you could expect to spend and whether leasing might actually be smarter than taking out a PCP.

Here, I’ll look at total cost of ownership (TCO): the overall cost of buying, running, and maintaining a car over the time you own it.

If you just want the final results, click below. Otherwise, here’s everything you need to consider.

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Remember, you can buy a brand new or used car right here on Carwow. And you can sell your car, too. We’re here to help you through every step of your car-changing journey.

Starting price

First up, let’s look at the starting price based on buying a Peugeot 208. You’re more likely to finance your car, so the total cost will usually include interest and additional fees. These costs can vary depending on the type of deal, when you buy, and current interest rates.

For the calculations, we used PCP finance, a flexible car finance option where your monthly payments cover much of the car’s expected depreciation rather than its full purchase price.

Using Peugeot’s own website, I’ve assumed a deposit of £5,000, a three-year term and annual mileage of 10,000 miles. I’ve also assumed that you’ve returned the car to the finance company after the term.

Here’s a breakdown of all the costs you’d be expecting. Note that at the time of writing, the Peugeot had a 8.5% APR and annual fixed rate interest, which is why I’ve added the total amount payable for reference. Peugeot also has a customer saving offer that’s been added.

Car’s list price	£23,595
Peugeot customer saving	£1,500
Initial deposit	£5,000
Regular monthly payments	£285.90
Total amount payable	£26,867.50
Optional finance payment	£9,861
Total cost to PCP if you return the car	£17,006.50

Road tax

You’ve just bought the car – now it’s time to sort out your road tax.

If your car was first registered on or after 1 April 2017, the amount you pay in the first year depends on its CO2 emissions. You can check this first-year rate on the official GOV.UK vehicle tax tables, and it may also appear on manufacturer or dealer websites. After the first year, most drivers pay a standard annual rate of £200.

In my calculations, this applies to the 208. The Allure 1.2-litre hybrid version emits 103g/km of CO2, which results in a first-year tax cost of £405.

With the standard annual rate thereafter, you’re looking at £805 in road tax over the course of three years.

Fuel costs

Now costs get a bit more complicated, as fuel prices are changing all the time. So, for my analysis, I used the national average petrol price of 159p per litre, based on RAC Fuel Watch data, at the time of writing.

Remember that fuel costs vary depending on where you live and the type of fuel station you use, whether that’s a motorway service station or a supermarket. The RAC Fuel Watch site provides a useful overview of prices, as does the Fuel Finder website and even Carwow’s own fuel prices tool.

When the reviews team at Carwow tested the 208, they averaged more than 50mpg, so I’ve used this fuel economy figure in our calculations. So, if you drive the Peugeot 208 for 10,000 miles per year, average around 50mpg and use the national average petrol price, it would cost around £4,336.97 in fuel over three years.

Depreciation

When you buy a car, you also need to consider depreciation – the amount a car loses in value over time. This varies depending on the model and a range of other factors.

In the first year, a car may typically lose around 15-35% of its value. After this initial drop, depreciation usually slows, with vehicles losing around 10-15% of their value in the second year.

You’ll lose around £9,925 on the Allure hybrid version of the Peugeot 208 over three years and 30,000 miles, based on valuation data from Cap HPI, a body which monitors depreciation, assuming all vehicles are being traded in at a dealership in good condition.

Remember that depreciation only really matters if you decide to buy the car outright at the end of the PCP agreement. Your monthly payments already account for much of the vehicle’s depreciation over the three-year term. For our calculations, I’ve stuck to the three-year term to keep things directly comparable with an alternative we’ll explore later.

How much will it cost you overall?

Here’s how much it could cost you to own a Peugeot 208 over three years with the PCP deal, road tax and fuel, assuming that you return it once the term ends:

Total cost to PCP if you return the car	£17,006.50
Road tax	£855
Fuel costs	£4,336.97
Total cost	£22,198.47

However, if you still have your eyes set on a 208 but want to stick to only having it for a few years, there’s another alternative to consider.

Is it cheaper to lease a Peugeot 208?

Leasing can be a good option if you like driving a new car every few years and want fixed, often lower monthly payments without the long-term commitment of ownership.

I’ve calculated this for the new Peugeot 208 to see whether leasing works out cheaper than buying. I used the same fuel costs as in the buying analysis to keep the comparison consistent. Leasing costs are based on relevant Carwow deals at the time of writing, assuming a three-year term and 10,000 miles per year.

Here’s a breakdown of costs for a lease deal found on Carwow that’s for the Allure hybrid version we’ve used for buying:

Monthly payments	£335.44
Initial payment	£4,320.28
Total cost of lease	£16,060.68
Total cost with fuel	£20,397.65

When you add fuel costs to the total lease, the calculations show that you’ll save around £1,800 over three years compared with the total cost of ownership.

Remember that road tax is included in monthly lease payments too, so you don’t need to factor it into your running costs.

Taken together, these factors make leasing a car a particularly appealing option, and suggests it offers the best overall value.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

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