Compare Lease purchase Car finance quotes (UK)

Find and compare UK lease purchase finance quotes

Car finance is shifting in the UK. New business values rose in 2025 and interest rate cuts have improved confidence. Use this guide to understand lease purchase, compare quotes, and time your decision for better value.

Is this guide right for you?

If you are a UK consumer weighing lease purchase against other car finance, want clarity on APR and total payable, and need a practical way to compare quotes for new, used, petrol, hybrid, or EV models, this guide was built for you. It suits first-time buyers and experienced motorists looking to lower costs.

What lease purchase and APR really mean

Lease purchase blends leasing flexibility with eventual ownership. You make monthly payments for a fixed term and, unlike pure leasing, you intend to own the vehicle by paying a final amount. It is attractive when you want lower monthly payments but still plan to keep the car.

Key terms to know:

• APR - Annual Percentage Rate that sums interest and certain charges. It is the headline measure to compare offers.
• Representative APR - Shown in adverts for typical borrowers. Your actual rate varies by credit profile and loan specifics.
• Balloon or final payment - A larger amount due at term end to take ownership. The size affects monthly payments and total cost.
• Deposit - Upfront amount from you or part-exchange to reduce borrowing.
• Term length - Usually 24-60 months. Longer terms lower monthly payments but can increase total interest.
• Total payable - The full amount you will pay over the agreement including deposit, monthly payments, fees, and any final payment.

Why rates differ:

• Market rates - In mid 2024, average floating car loan rates were about 7.48%. Actual quotes move with Bank of England changes.
• Credit risk - Lenders price higher for riskier profiles. Clean histories and stable income often secure lower APRs.
• Loan size and collateral - Larger loans or higher value cars can alter pricing and required deposits.
• Product rules - Mileage limits and condition clauses affect residual values, shaping monthly costs.

Your finance choices at a glance

Here is how lease purchase compares with other options commonly available in the UK.

Standout insight: Lease purchase keeps monthly costs manageable while preserving a path to ownership, but the final payment must be planned for early.

Small APR differences compound over multi-year terms. Compare quotes side-by-side.

What drives cost - and total you will pay

Costs in car finance are shaped by rates, timing, and loan structure. In 2024 the UK market reached nearly £39 billion, with strong lender competition. March 2025 saw record growth in volumes and values, showing how seasonal plate changes and tax expectations can influence deals.

• Interest rates - Rate cuts can improve affordability. Even a 0.5 percentage point difference can save hundreds over a typical term.
• Deposit strategy - A higher deposit reduces interest charges but consider opportunity costs.
• Final payment sizing - Larger balloons lower monthly costs but increase the amount due at term end.
• Mileage and condition terms - Exceeding allowances can add charges, particularly in PCP and subscription models.
• Vehicle type - EVs and hybrids increasingly feature in leasing portfolios. Battery warranties and residual value assumptions can improve or worsen terms.

Quote timing matters. New registration plates and policy changes can boost lender promotional activity. With UK finance providers expecting growth, competitive quotes are likely as consumer confidence and savings remain supportive.

Who qualifies and what lenders check

Eligibility for lease purchase and other finance products is based on affordability and risk. Lenders will typically review:

• Credit history - Payment records, defaults, and utilisation. Better histories tend to secure lower APRs.
• Income and stability - Payslips, employment status, or verified self-employed income.
• Existing commitments - Mortgages, loans, and subscriptions to gauge affordability.
• Deposit and vehicle - Higher deposits reduce lender exposure. Car age and value influence terms.
• Residency and ID - UK address history and proof of identity are standard.

Used car finance trends in 2025 show values up even when volumes are flat. That can reflect higher average loan amounts or more expensive models, which may tighten affordability checks. EV finance is expanding, with battery electric vehicles gaining share in UK fleets, though wider consumer adoption is steady rather than rapid. Expect more lender choice for EVs, but be prepared to evidence home charging access or mileage patterns if asked.

Practical tip: Obtain a soft-search pre-approval when possible to gauge bands without harming your credit score.

Get your quote in 7 clear steps

1. Define budget, term, mileage, and expected final payment.
2. Check credit score and fix quick wins before applying.
3. Shortlist cars - compare new, used, petrol, hybrid, BEV.
4. Gather documents - ID, address, income proof, deposit source.
5. Request quotes from multiple lenders and dealers.
6. Compare APR, total payable, fees, and conditions side-by-side.
7. Lock the best offer and schedule delivery or collection.

Upsides and trade-offs of lease purchase

Pros:

• Lower monthly payments than many ownership routes.
• Clear path to owning the car at term end.
• Flexible deposits and terms to suit budgets.
• Competitive in a large, resilient UK market.

Cons:

• Final payment can be sizable - needs planning.
• Mileage and condition rules may apply.
• Rates vary widely with credit risk.
• Early exit can incur charges and negative equity.

Red flags and fine print

• Fees - Arrangement, option-to-purchase, and early settlement costs add up.
• Representative APR vs your APR - Do not assume you will receive headline rates.
• Insurance and maintenance - Not usually included. Budget for tyres, servicing, and road tax.
• EV specifics - Battery health, warranty coverage, and charger access can affect residuals and running costs.
• Seasonal timing - Registration plate changes and tax updates can move prices. Use these windows to negotiate.

Short standout line: Always compare total payable, not just monthly price.

If lease purchase is not the fit

• Hire Purchase - Straightforward ownership without a final balloon.
• PCP - Lower monthly payments with hand-back flexibility.
• Personal Loan - Shop bank rates, pay dealer like cash.
• Subscription - All-inclusive convenience with rolling access.
• Deferred purchase via savings - Build a larger deposit to reduce borrowing.

Market note: Car subscriptions are growing quickly in the UK but suit drivers who prioritise flexibility over ownership.

Straight answers to common UK questions

Q: Is now a good time to compare quotes? A: With interest rate cuts and lender optimism, quotes are competitive. Seasonal shifts like new plates can create strong offers.

Q: How does my credit profile change the APR? A: Lenders price risk. Strong credit histories, lower utilisation, and stable income tend to lower APRs and fees.

Q: Are EVs cheaper to finance? A: EV finance availability is increasing. Monthly costs depend on residual values, incentives, and battery warranty terms. Running costs can be lower.

Q: What if I exceed mileage rules? A: Expect per-mile charges or reduced residual values. Build realistic mileage into the agreement to avoid end-of-term surprises.

Q: How big is the final payment? A: It varies by car and term. Larger balloons reduce monthly costs but increase the amount due to gain ownership.

Q: Do most UK buyers use finance? A: Yes. Millions of cars are bought at point of sale with finance, making quote comparison essential.

Ready to compare quotes?

• Shortlist at least three lenders or broker platforms.
• Request like-for-like quotes on the same car and term.
• Compare APR, total payable, fees, mileage rules, and final payments.
• Re-check affordability under stress scenarios and rate changes.

Tip: Keep a spreadsheet or use a comparison tool to track differences. Small percentage gaps matter over multiple years.

Important information

This guide provides general information for UK consumers and is not financial advice. Always check terms, eligibility, and affordability before committing. Rates, products, and tax rules change, so verify details with your lender or broker.