HP vs lease vs cash calculator

Most asset finance calculators stop at the monthly payment. For a UK limited company, that misses half the picture. Capital allowances on purchase and hire purchase, interest deductions on HP, and rental deductions on leases all change what the asset actually costs once corporation tax is accounted for.

This hire purchase vs lease calculator models representative APRs you can edit to match a quote. It applies UK corporation tax at 19%, 26.5% (marginal band) or 25% depending on your profit band, and credits relief at month 21 — end of the accounting year plus nine months to payment — so you can see timing as well as totals.

Hire purchase uses standard amortisation on the financed amount after your deposit. Lease rentals use the same formula on the full asset cost with no deposit. Cash purchase is a single outflow on day one with capital allowance relief only.

Tax relief on HP interest is applied in proportion to interest accrued each year. Lease rental relief follows the same annual pattern. Figures are ex VAT throughout — if you are VAT registered, you may reclaim VAT under different timing rules for HP and lease; an info note appears when you toggle VAT registration.

A company buying a £50,000 new machine on 60-month HP at 9.9% APR with a 10% deposit and profit in the £50k–£250k band might pay about £954 per month on £45,000 financed. After capital allowances and interest relief at 26.5%, the net all-in HP cost is materially higher than paying cash — but cash ties up £50,000 immediately.

Run your own asset cost, term and rates above. Then use Get my exact figure to pass your inputs to Tera — we compare options from our lender panel with no broker fee to you.