Hire purchase, finance lease or rent? Compare your car options
Enter the car and the quotes you've been given. We'll compare the real cost of each option to your business after VAT and tax relief. Your figures stay in your own browser.
Net cost to your business over months
How the figures are worked out
Beyond the numbers
Hire purchase
- You own the car once the last payment is made
- No mileage limits or return charges
- You carry the risk of the car's resale value
- Shown as an asset and a loan in your accounts
Finance lease
- You never own the car but get most of the sale proceeds back
- Lower VAT cost spread over the rentals
- You carry the risk of the car's resale value
- Usually shown in your accounts as an asset and a liability
Contract hire
- Fixed monthly cost, often with maintenance included
- No resale risk: you simply hand the car back
- Mileage limits and damage charges can apply
- Under the updated FRS 102 (periods from 1 January 2026) most leases also go on the balance sheet; FRS 105 micro-entities are not affected
This tool gives an illustrative comparison based only on the figures you enter. It simplifies the tax rules: capital allowances are treated as if the car were in a pool of its own, tax relief is shown as the total eventually received rather than when it's received, and interest on money is ignored. It doesn't include the company car benefit in kind, which depends on the car's list price and CO2 and is the same whichever way you finance it. It is not financial or tax advice.