How to Compare Lease Deals and Spot a Good One

Divide the car's list price by the monthly rental. Above 90 is strong value, 80 to 90 is reasonable, below 80 means keep looking. That single sum tells you more than any headline price - as long as every deal you compare has the same initial rental, term, mileage and VAT basis.

How do I spot a good lease deal?

A good deal is one where you get a lot of car for each pound of monthly rental, on terms that match how you actually drive. The fastest check: divide the car's list price by the monthly rental. Above 90 is strong value, 80 to 90 is reasonable, below 80 is poor.

That's the short answer, and it works because it strips out the thing that confuses everyone - the fact that a £600 rental on a £70,000 car can be a far better deal than a £250 rental on a £22,000 one. The monthly figure on its own tells you almost nothing about value. What you're really asking is: how much car am I getting for my money?

Everything else in this guide is about making sure you're comparing the same thing twice, and about the costs that sit outside the monthly figure. Because that's where most disappointing leases go wrong - not in the price, but in the mileage that was set too low, or the maintenance that wasn't included, or the fee nobody mentioned until the paperwork arrived.

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The bang-for-buck test: list price divided by rental

Take the car's full list price, divide it by the monthly rental, and you get the number of monthly rentals that fit inside the price of the car. Higher is better. Above 90 is strong value, 80 up to and including 90 is reasonable, below 80 is poor value and worth walking away from.

Assume the standard 9+35 profile throughout - nine months' rental paid upfront as the initial rental, then 35 monthly payments - unless a deal states otherwise.

Three worked examples

All figures below are illustrative round numbers, not real offers, and all three assume a 9+35 profile:

You may have come across the international "1% rule" - the idea that a monthly payment at or below 1% of list price marks a strong deal. It's the same test inverted, so a score of 100 is exactly the 1% rule. It's an informal consumer rule of thumb rather than an industry standard, and it has the same limitation: it only means anything on a like-for-like profile.

One practical note. This is a value test, not a suitability test. A car can score 95 and still be the wrong choice if the mileage allowance is too tight or the boot's too small. Score first, sanity-check second.

How do I work out the total cost of a lease?

Add the initial rental to every monthly payment that follows, then add any fees. On a 9+35 at £330 a month, that's £2,970 upfront (9 × £330) plus £11,550 (35 × £330), giving £14,520 - which is simply 44 × £330. Do this for every deal on your shortlist and rank them.

Total cost is the honest sledgehammer. It catches everything the monthly figure hides, including the profiles designed to look cheap. Run it alongside the bang-for-buck score, not instead of it: the score tells you whether the car is well priced, the total tells you what leaves your bank account.

Two things worth watching as you total up:

• Payment count. A 9+35 has 44 payments in total, not 36. A 1+47 has 48. Miscounting here is the single most common comparison error we see.
• Term versus cost. A 48-month contract usually shows a lower monthly figure than a 36-month one on the same car, but you're committed for a year longer. Our guide to choosing between 24, 36 and 48 months covers the trade-off properly.

What's included in the price, and what isn't?

A contract hire rental normally covers use of the vehicle, road tax for the term and the manufacturer warranty. It does not usually include servicing, tyres, insurance or excess mileage. Two deals at the same monthly price can differ by hundreds of pounds a year once you account for what each one leaves out.

Check these five things on every quote before you compare anything:

Why are some lease deals so much cheaper than others?

A rental covers the gap between what the vehicle costs to acquire and its forecast value at the end of the term - its residual value - plus interest charges. Anything that lowers the acquisition cost, or holds up the residual, brings the rental down. That's why two similar cars can price hundreds of pounds apart.

Two mechanisms do most of the work. First, volume: a broker commits to manufacturers in bulk, hundreds of vehicles at a time, and secures terms that an individual - or a business taking one or two cars - can't replicate however hard they haggle. Second, residual values are forecast against the vehicle itself, based on what that car is expected to be worth in three or four years' time, not against what the funder paid for it. So a volume discount comes off the acquisition side while the residual stays where it is.

The practical consequence for you: the strongest value sits where a broker has committed to a large volume of a particular model. Those are the special offers. On an ordinary model that hasn't been bought in depth, the terms still beat what you'd get on your own, but they won't match the offers.

Which leads to the most useful piece of advice in this whole guide, and it's not about arithmetic. Most people no longer need one specific model - they want the best car for the money. Decide what you actually need from a car and what you can spend, then look at what represents the best value inside that box. Fix on one model in one colour first and you're bidding against yourself.

Leasing isn't automatically the cheapest route for everyone, either. If you keep cars for eight or ten years and drive them into the ground, buying can win. Our leasing versus buying comparison sets out both sides.

Red flags: how to spot a dud deal

The clearest warning signs are a price that only exists on a comparison listing, pressure to pay a fee to "secure" a car, a firm you can't find on the Financial Services Register, and vague answers about mileage, term or what's included. Any one of those is reason enough to walk.

So is a suspiciously cheap deal ever genuine?

Sometimes, yes - manufacturer support on a model that isn't selling can produce a genuinely excellent rental, and stock cars that need moving can too. But check the small print before you get excited. In our experience, unusually low headline prices most often turn out to be 5,000 miles a year, a 48-month term, a 12-month initial rental, or an entry trim with none of the kit shown in the photograph. All legitimate, none of them what the reader assumed.

Checks worth two minutes of your time

• Is the broker on the FCA's Financial Services Register? A credit broker arranging regulated agreements must be authorised.
• Are they a BVRLA member? The BVRLA Leasing Broker Code of Conduct covers clear pricing and transparent terms, members are audited against it, and the BVRLA is a government-approved consumer ADR body if something goes wrong.
• Will they name the funder before you sign? You should know who the finance agreement is actually with.
• Does the quote state term, initial rental, mileage, VAT treatment and fees on one document? If not, ask for one that does.
• Is the price still valid? Lease pricing moves. A listing that's months old is a starting point, not an offer.

Comparing personal and business deals

Personal Contract Hire (PCH) prices include VAT; Business Contract Hire (BCH) prices exclude it. So a BCH rental will always look cheaper on screen. VAT-registered businesses can typically reclaim 50% of the VAT on a car used privately as well as for business, and often 100% on a van, which changes the maths again.

If you're choosing a company car, the tax treatment usually matters more than the rental. According to HMRC's published company car tax rates, a zero-emission electric car attracts a Benefit in Kind (BIK) rate - the tax charge on a benefit your employer provides - of 4% of P11D list price for the 2026/27 tax year, rising by one percentage point in 2027/28. Petrol and diesel cars scale with CO2 emissions, running from roughly 15% up to a 37% cap, with higher-emission models sitting at the top end of that range.

Because EV company car tax is so low, a salary sacrifice scheme can be the cheapest way for an employee to run a new electric car, and the comparison there is against your net pay rather than a rental. Worth modelling separately if your employer offers one. You can check any specific car with HMRC's company car tax calculator on GOV.UK.

Your deal comparison checklist

Work through these six steps in order and you'll have a defensible answer within half an hour. The first three establish whether a deal is good value; the last three establish whether it's right for you. Skip either half and you're guessing.

1. Fix your profile first. Decide your term, annual mileage and how much you want to put down, then only look at quotes on that profile. This is what makes every later comparison valid.
2. Score each deal. List price ÷ monthly rental, same VAT basis on both sides. Above 90 is strong and worth pursuing; 80 up to and including 90 is reasonable, so shop around the same profile before committing; below 80, keep looking.
3. Total each deal. Initial rental + (monthly rental × number of monthly payments) + fees. Sanity-check that against the score - if a high-scoring deal has a big total, look again at the profile.
4. Line up the inclusions. Maintenance, delivery, fees, road tax, trim level. Adjust your comparison for anything one deal has and the other doesn't.
5. Check it fits your life. Mileage, boot space, charging at home, gearbox preference. A brilliant score on the wrong car is still the wrong car.
6. Verify the supplier. FCA authorised, BVRLA member, funder named, quote in writing, no upfront reservation fee.

And if two deals come out level? Take the one with the shorter term or the more generous mileage. Flexibility is worth more than a few pounds a month, and most people's circumstances change more over three years than they expect.

Frequently Asked Questions

Written by the leasing team at First Vehicle Leasing, an FCA-authorised credit broker and BVRLA member with over 25 years arranging personal and business vehicle leases across the UK. Our guides are reviewed and updated as rates, tax rules and industry standards change.