Car Lease Calculator
Work out your monthly lease payment, the total of all payments, the buyout value and the total cost — including the initial deposit, residual value and interest rate.
Compare lease offers
Check car lease and loan offers.
Total cost = deposit + all payments + buyout. Finance cost = total cost − vehicle value. Estimate only; a real offer depends on the lender (fees, GAP insurance, VAT/tax).
How the lease calculator works
The lease payment repays the financed amount (vehicle value − deposit) less the discounted residual (buyout) value, at the given interest rate. A high residual lowers the monthly payment, but the buyout amount falls due at the end.
Total cost assumes you buy the car at the end: deposit + all payments + buyout value. The gap between that and the vehicle value is the finance cost (interest and margin).
Payment formula
- Financed = value − deposit
- Payment repays (financed − discounted buyout)
- Total cost = deposit + payments + buyout
- Finance cost = total cost − vehicle value
Frequently asked questions
What is the residual / buyout value?
It is the amount you pay to own the car at the end of the lease, given as a % of the starting value. A higher buyout lowers your monthly payment but raises the lump sum due at the end.
Lease or loan — which is cheaper?
It depends on the interest rate, fees and your tax situation. Businesses often gain tax advantages from leasing; for consumers a loan can be simpler. Compare the total cost of both.
Does it include VAT and insurance?
No — it models the financing only. VAT/tax, insurance, GAP cover and extra fees should be added separately per the lender's offer.
Is my data sent anywhere?
No — everything is calculated locally in your browser.
How car leasing really works — and what it costs
A lease (and its close cousin, PCP) does not finance the whole car — it finances the slice of value the car loses while you use it. You pay a deposit, monthly payments covering depreciation between the initial value and the agreed residual value, plus interest on the capital tied up. That is why leasing a £30,000 car can cost less per month than a loan on a £15,000 one: you are renting the gentle part of the depreciation curve.
The calculator above takes vehicle value, deposit, residual/buyout value, term and interest rate, and splits the monthly payment into its depreciation and finance parts — the same arithmetic underlying quotes from leasing companies, made visible.
Worked example
A £30,000 car, £3,000 deposit, £15,000 residual after 36 months at 7%: the monthly payment comes out around £458. Over the term you pay about £19,500 in total (deposit plus payments) for three years’ use of the car — and at the end you own nothing but have also carried no resale risk: if the market value turns out below £15,000, that loss belongs to the leasing company.
Reading a lease quote like a professional
- Compare the total cost of the term (all payments + deposit + fees), not the monthly figure — deposits and terms differ between quotes precisely to confuse monthly comparisons.
- Check the money factor / APR. A low monthly payment with a high implied interest rate means you are overpaying for the finance part; the calculator exposes it.
- Mileage limits are contractual. Excess-mileage charges of 5–15p per mile add up fast; be realistic, and price the higher allowance upfront if unsure.
- Condition standards apply at return. Budget for end-of-contract charges beyond fair wear and tear — or for the discipline of kerb-free parking.
- On PCP, the balloon is optional. If the car’s market value exceeds the residual at the end, buying and reselling captures that equity; if not, walk away — that asymmetry is genuinely valuable.
Additional questions
Lease, PCP or bank loan — which is cheapest?
A bank loan on a sensibly-priced used car is usually cheapest in total, because you keep the asset. Leasing wins on cash flow, warranty-covered motoring and zero resale risk. The mistake is comparing a lease’s monthly payment with a loan’s — one builds equity, the other does not.
Why is the residual value so important?
Because you pay for everything between the price and the residual. A car that holds value (high residual %) is cheap to lease even if expensive to buy — which is why leases on premium German brands or Toyotas often undercut mainstream cars.
Can I end a lease early?
Only expensively — typically by paying most or all remaining payments, or via formal early-termination quotes. If your circumstances may change, prefer shorter terms or ensure the contract allows transfers.
Written & fact-checked by Łukasz Wójcik — independent developer, not a licensed financial adviser. Last reviewed: 2026-08-17.
Methodology & assumptions
This estimate uses the standard annuity (equal-payment) formula for a fixed-rate loan, based only on the amount, rate and term you enter — it excludes arrangement fees, early-repayment charges and any lender-specific costs.
Scope & limitations
This calculator is a free, general-purpose estimation tool. It uses simplified assumptions, does not know your full personal or financial circumstances, and is not a substitute for professional financial, tax or legal advice. Figures can change after publication — always check the current rate or threshold at the source below before relying on a result.
Where to check this yourself
Every rate, threshold and rule used above comes from the bodies below. They are the authority; this page is not. Where a figure here disagrees with a source, the source is right — and we would be grateful if you told us. Links go to official government bodies and to registered charities that give free, impartial guidance; none of them pays us and we take no commission.