Car lease vs buy calculator
Leasing looks cheaper each month, but you hand the car back. Buying costs more each month, but you own something at the end. Compare the two over the same term.
How this is calculated
Leasing costs the initial payment, the monthly payments and any fees. The car goes back at the end.
Buying costs the deposit and the finance payments over the same term, which here repay the loan in full. What the car is worth at the end is taken off, because you keep it.
Running costs such as insurance, tax and servicing are left out because they are usually similar either way.
Rates used · 2026/27
| Lease | initial + monthly + fees |
| Buy | deposit + payments − value at end |
| Biggest unknown | the car's value at the end |
| Excluded | insurance, tax, servicing |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
Leasing for 36 months at £300 a month with a £2,700 initial payment and £300 of fees costs £13,800. Buying the same £28,000 car with £3,000 down at 7.9% costs £31,161, less £15,000 for the car at the end, so £16,161. Leasing comes out £2,361 cheaper on these figures.
Common questions
Is it cheaper to lease or buy a car?
It depends mostly on how much the car will be worth at the end. Cars that lose value quickly often favour leasing; cars that hold value favour buying.
What happens at the end of a lease?
You hand the car back. You may pay for miles over the allowance and for damage beyond fair wear and tear.
How is PCP different?
PCP is finance with a large final payment. You can pay it and keep the car, or hand it back. The PCP vs HP calculator compares those.
Can I lease through my business?
Businesses can often reclaim some of the VAT and count lease payments as an expense. Check with an accountant.