See whether leasing (Personal Contract Hire) or buying works out cheaper — the monthly rental, the return value, total rentals and how much extra it costs versus paying cash — from the price, deposit, return value, rate and term.
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⇆Monthly/ month
537.87£
Residual6,000 £
Total rentals28,818 £
Total to own34,818 £
Extra vs cash4,818 £
PCH is a pure lease — you hand the car back subject to mileage and condition, with no option to own. Businesses can reclaim 50% of the VAT on the rentals.
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Lease or buy your next car? See the real difference. Enter the car price, deposit, return value, rate and term to see the monthly rental, what you pay in total and how it compares with paying cash. Instant, in your browser, no account.
⚖︎ Results are for informational purposes and do not constitute tax advice. For specific situations, consult a licensed accountant or the relevant tax authority.
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iHow it is calculated
With Personal Contract Hire (PCH) the monthly rental is based on the car's expected depreciation (price − return value) plus interest; total cost = deposit + monthly rentals over the term. Buy instead, and you pay the price now but keep the residual value:
extra vs cash = total rentals + deposit − (price − return value)
On a typical PCH deal quoted as 9+47 — nine monthly rentals upfront, then 47 more — the monthly figure looks low because you only pay for the car's depreciation, not its full value. But you never own it: at the end you hand it back subject to mileage and condition.
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?Frequently asked questions
What's the difference between PCH and PCP?
PCH (Personal Contract Hire) is a pure lease: you pay an initial rental and monthly rentals, then return the car — there is no option to buy and no balloon payment. PCP includes an optional final balloon payment that lets you keep the car if you want to.
What does '9+47' mean?
It is the payment profile: nine months' rental paid upfront as the initial rental, followed by 47 monthly payments. A bigger upfront figure (e.g. 12+35) lowers the monthly rental but raises the amount you commit at the start.
Can I reclaim the VAT on a lease?
A VAT-registered business can typically reclaim 50% of the VAT on the rentals of a car used for both business and private travel (100% if it is used exclusively for business). Private individuals cannot reclaim VAT.
What is the return value in this tool?
It represents the car's expected value at the end of the lease — the residual the finance company keeps because you hand the car back. On PCH you never pay it; it just shapes how the monthly rental is worked out.
Is leasing cheaper than buying?
Over a short term with a low-depreciation car, leasing can be cheaper month to month, but you own nothing at the end. Buying costs more upfront but leaves you with an asset. Compare the total-cost and extra-vs-cash figures before deciding.
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