Lease or buy: Which is cheapest for you?
A low lease payment can be tempting. The down payment and other expenses must be included, though, before it can be compared with buying the car. The calculator sets up the two options over the same period and with the same expected mileage.
Worked example
- Period: 36 months
- Initial payment: 1,700.00 GBP
- Monthly payment: 230.00 GBP
- Fees in the period: 340.00 GBP
- Purchase price: 23,000.00 GBP
- Expected sale price: 16,000.00 GBP
- Expenses that leasing covers: 2,300.00 GBP
Cheapest over 36 months: Buying
9,300 GBP
Leasing costs 1,020 GBP more.
| Leasing | Buying | |
|---|---|---|
| Total | 10,320 GBP | 9,300 GBP |
| Per month | 287 GBP | 258 GBP |
Equal cost at a sale price of 14,980 GBP . If the car sells for less, leasing is cheapest with these numbers.
Loan repayments are not a cost. The result only describes your inputs; return conditions and the risk of depreciation must also suit you.
Compare the whole period
For leasing, you enter the down payment, monthly payment and fees. Add mileage charges and expenses the agreement does not cover. For buying, the purchase price, expected sale price, financing costs and running costs are included.
The expected sale price can move the result considerably. So use more than one estimate. The calculator also shows which sale price makes the two options cost the same under the chosen assumptions.
How to calculate an offer
Use the same car needs
Choose the same number of months and kilometers in both scenarios. Check whether service, tires and insurance are included in the lease agreement. Those expenses must be treated the same way in the comparison.
Example of total price
A down payment of 15,000, 36 payments of 2,000 and fees of 3,000 give 90,000 before other expenses. If you buy for 200,000 in cash and sell for 140,000, the depreciation is 60,000. Running costs and any interest come on top.
The result describes the economics of your inputs. The risk of depreciation, the freedom to sell and the return conditions of the agreement must also suit your needs. Use the car budget to look more closely at the ongoing expenses.