Car Lease vs Buy Calculator

Compare leasing vs buying a car on finance. See which is cheaper after depreciation and interest.

Last updated: April 2026 · Source: FCA — Car finance guidance

£

Lease Option

£
£

Buy Option (Finance)

£

Lease

£11,580.00

£321.67/month effective

Cheaper

Buy (net of resale)

£13,038.24

£362.17/month effective

Leasing saves you £1,458.24 over 36 months

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Leasing (Personal Contract Hire) means paying a fixed monthly amount to use a car for 2-4 years with no option to own it at the end. You never own the vehicle, but monthly costs are predictable and often include maintenance packages. Mileage limits apply (typically 8,000-15,000 miles/year) with excess charges of 5-15p per mile.

Buying outright or through HP means you own the car and can sell it whenever you choose. The true cost of buying includes depreciation, interest (if financed), insurance, maintenance and road tax. Buying is typically cheaper over 5+ years if you keep the car long enough for depreciation to slow down.

This calculator compares the total cost of leasing versus buying over your chosen period. It accounts for the deposit, monthly payments, maintenance, depreciation (for buying) and the residual value of the car if you buy. The breakeven point — where buying becomes cheaper than leasing — is usually around 4-5 years.

Example: £28,000 car, 3-year comparison, 10,000 miles/year

  1. Lease: £300/month x 36 + £900 initial = £11,700 total
  2. Buy (HP): £520/month x 36 + £2,800 deposit = £21,520 paid
  3. Car value after 3 years: ~£14,000
  4. Net cost of buying: £21,520 - £14,000 = £7,520
  5. Leasing costs £4,180 more over 3 years (but includes maintenance)

Source: FCA — Car finance guidance

Frequently Asked Questions

What does the Car Lease vs Buy Calculator do?
Compare leasing vs buying a car on finance. See which is cheaper after depreciation and interest. All calculations are performed in your browser using official UK rates and thresholds.
Does this use current UK rates?
Yes. This calculator uses the latest UK rates for vehicle tax, fuel duty and other motoring costs as of the 2025/26 financial year.
Is this suitable for electric vehicles?
From April 2025, electric vehicles are no longer exempt from Vehicle Excise Duty (road tax). This calculator accounts for EV-specific rates where applicable.