Lease vs Buy Calculator
Compare the true cost of buying a car (with a loan) against leasing one over the same period. Buying builds equity through the car's resale value; leasing means you hand the car back at the end of the term.
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The comparison is made over the lease term. If the loan term is longer, remaining loan payments are included as a buy-side cost. If shorter, the car is owned outright before the period ends.
Related: Car Loan · Depreciation
How the Lease vs Buy Calculator works
This calculator compares the true cost of leasing a car against buying one with a loan over the same period. For the buy side, it calculates monthly loan repayments from the car price, deposit, interest rate, and loan term, then totals the money paid out during the comparison period. It subtracts an estimated resale value to arrive at the net cost of ownership — the actual amount the car has cost you after recovering its remaining value.
For the lease side, the total cost is simply the upfront rental plus all monthly payments plus any excess mileage charges — since you hand the car back with no equity returned. The comparison is made over the lease term; if the loan runs longer, remaining loan payments in that period are still counted as a buying cost.
The result shows which option is cheaper and by how much, along with a full breakdown for each scenario. Note that this calculator focuses on pure cost comparison and does not account for insurance differences, servicing packages, road tax, or the intangible benefits of ownership. For many drivers, the ability to own a vehicle outright and drive it without mileage restrictions is worth paying a premium for.
Frequently asked questions
Is it better to lease or buy a car?
Whether leasing or buying is better depends on your priorities. Leasing offers lower monthly payments, a new car every few years, and no depreciation risk — but you never own the vehicle and face mileage limits. Buying costs more upfront but builds equity as you own an asset. For high-mileage drivers or those wanting long-term value, buying is often cheaper. For lower monthly outgoings and regular upgrades, leasing can be attractive.
What are the hidden costs of car leasing?
Common hidden costs of car leasing in the UK include excess mileage charges (typically 5–15p per mile over the agreed limit), damage charges at the end of the lease for any wear beyond what is considered fair, early termination fees if you need to exit the agreement, and the initial rental (often 3–9 months upfront). Maintenance packages are sometimes optional extras that add to the monthly cost.
Does leasing affect my credit score?
Yes, taking out a car lease involves a credit check and results in a finance agreement recorded on your credit file. Making all monthly payments on time can actually improve your credit score over time by demonstrating reliable repayment behaviour. Missing payments will negatively affect your score. When you apply for the lease, the hard credit search itself may cause a small, temporary dip in your score.
What happens at the end of a car lease?
At the end of a personal contract hire (PCH) or business lease, you simply return the car to the finance company. The vehicle is inspected and any excess mileage or damage beyond fair wear and tear is charged. You do not receive any money back, as you have no ownership interest in the vehicle. Most drivers then either start a new lease, buy a car outright, or enter a different finance arrangement.