Buyer guide
How a car lease total is calculated: initial rental + (n − 1) monthly payments
Published · Example prices are real CarJab offers taken on ; dealer prices change.
A UK personal lease costs the initial rental plus one fewer monthly payment than the contract length: total = initial rental + (n − 1) × monthly rental, where n is the contract length in months. It is not the monthly price times n.
The formula
The initial rental is a number of monthly rentals paid up front, for example 1, 3, 6, 9 or 12. Leasing companies write the payment profile as upfront + remaining. A 24-month contract with 9 months up front is 9+23: the initial rental, then 23 monthly payments. A 48-month contract with 12 months up front is 12+47.
lease total = initial rental + (contract months − 1) × monthly rental normalised monthly cost = lease total ÷ contract months
Two common mistakes:
- monthly × term leaves out the extra months you paid up front.
- initial rental + monthly × term counts the first month twice: the initial rental already replaces it.
This is exactly how CarJab totals a lease: when the initial rental is a whole number of monthly rentals, the total shown on a deal is initial + (term − 1) × monthly. MoneyHelper's advice is the same in spirit: work out exactly what you will pay, because a low monthly price can hide a big upfront fee.
Worked example: 12 months up front on a 24-month lease
| Monthly rental | £171.34 (inc. VAT) |
|---|---|
| Initial rental | £2,056.08 = 12 × £171.34 |
| Contract / mileage | 24 months / 5,000 miles a year |
| Profile | 12+23 |
| Lease total | £2,056.08 + 23 × £171.34 = £5,996.90 |
| Normalised monthly cost | £5,996.90 ÷ 24 = £249.87 |
Getting it wrong either way: 24 × £171.34 = £4,112.16 understates the cost by £1,884.74; £2,056.08 + 24 × £171.34 = £6,168.24 overstates it by one payment. The advertised £171.34 a month is really £249.87 a month once the initial rental is counted. See this deal.
Worked example: the same car, two upfront profiles
| 12+47: initial rental | £3,012.00 (12 × £251.00) |
|---|---|
| 12+47: lease total | £3,012.00 + 47 × £251.00 = £14,809.00 |
| 1+47: initial rental | £315.50 |
| 1+47: lease total | £315.50 + 47 × £315.50 = £15,144.00 (here, the same as 48 × £315.50) |
| Difference over the contract | £335.00 in favour of 12 up front |
With one month up front the formula and monthly × term give the same answer, which is why the mistake is easy to miss until the initial rental is bigger. Live offers: Nissan Qashqai lease deals.
What the total does not include
- Excess mileage charges if you go over the allowance, and damage charges beyond fair wear and tear at return (see the excess mileage guide).
- Insurance, fuel or charging, and servicing unless a maintenance package is included.
- Any broker or admin fee the dealer lists separately.
- Early termination charges. The BVRLA says ending a contract hire early may not be allowed and, if it is, can cost much more than 50% of the total amount payable.
Under the BVRLA Leasing Code, members must explain the key costs before you sign, including excess mileage charges, return standards and early termination.
Use it to compare deals
Divide each lease total by its contract length and compare like with like (same term and mileage). That is the ranking CarJab uses for best deals this week. More in what makes a good lease deal.
Questions and answers
How do I work out the total cost of a car lease?
Add the initial rental to the monthly rental multiplied by (contract months − 1). For a 24-month lease with a £2,056.08 initial rental and £171.34 a month: £2,056.08 + 23 × £171.34 = £5,996.90.
What does 9+23 or 12+47 mean on a lease?
The first number is how many monthly rentals you pay up front as the initial rental. The second is how many monthly payments follow. 12+47 is a 48-month contract: 12 rentals up front, then 47 monthly payments.
Why is a lease total not the monthly price times the term?
Because the initial rental replaces the first month’s payment and adds the extra months up front. Monthly × term leaves those extra upfront months out; initial + monthly × term counts the first month twice.
Does the lease total include VAT?
Personal lease prices on CarJab are the personal (VAT-inclusive) prices printed by the dealer. Business prices that exclude VAT are not listed as personal deals.
Sources
- MoneyHelper: Leasing a car with Personal Contract Hire (PCH)
- BVRLA: Leasing: Frequently Asked Questions
- BVRLA: BVRLA Leasing Code of Conduct (PDF)
This guide is general information, not financial or tax advice. CarJab is not a lender or broker.