What it means
A super common way to say something's ridiculously expensive. You drop it when the price is so rude it feels like they're not asking for cash, they're asking for spare limbs. Works for anything that rinses your bank account, from rent and repairs to tickets, food, and holidays.
Usage examples
"Garage wanted £900 for a tiny scratch and I nearly choked on my tea. That repair costs an arm and a leg, so I’m living with it."
"Concert tickets cost an arm and a leg these days, I nearly fainted at the price."
"We wanted the seaside cottage but the rent was an arm and a leg, so we passed."
"I looked at the festival prices and laughed my head off. Two burgers and a warm pint cost an arm and a leg."
"We were gonna book the hotel, but one night there was an arm and a leg, so we found a dodgy little place down the road instead."
Where it comes from
This idiom is well established in English by the mid 20th century, with printed examples from the 1940s. It runs on blunt exaggeration: the thing costs so much you'd have to give up an arm and a leg to afford it. Nobody means it literally. It's just dramatic, everyday English for painfully expensive.