What Is the 1.5 Rule When Leasing a Car?
If you've been researching car lease deals, you may have come across something called the 1.5 rule.
It's a simple benchmark used by some drivers to help judge whether a lease deal offers good value. While it's not an official industry rule, it can provide a quick way to compare different vehicles and monthly payments.
Here's everything you need to know.
What Is the 1.5 Rule?
The 1.5 rule suggests that a lease deal may represent good value if the monthly payment is no more than 1.5% of the vehicle's list price.
For example:
- Vehicle list price: £40,000
- 1.5% of £40,000 = £600
Under the 1.5 rule, a monthly lease payment of £600 or less could be considered a competitive deal.
Many leasing customers use this as a rough guide when comparing different vehicles and offers.
If you're new to leasing, you may also find our car leasing explained guide useful, which covers the basics of how leasing works and the different types of agreements.
How Do You Calculate the 1.5 Rule?
The calculation is straightforward.
Multiply the vehicle's list price by 1.5%.
Example 1
- Vehicle list price: £30,000
- £30,000 × 1.5% = £450
A monthly payment of £450 or less would meet the 1.5 rule.
Example 2
- Vehicle list price: £50,000
- £50,000 × 1.5% = £750
A monthly payment of £750 or less would meet the benchmark.
The lower the monthly payment compared to the vehicle's list price, the stronger the deal is likely to be.
Is the 1.5 Rule Always Accurate?
Not necessarily.
While the 1.5 rule can be useful for quick comparisons, it doesn't tell the full story.
A lease deal is influenced by several factors, including:
- Contract length
- Annual mileage allowance
- Initial rental
- Vehicle depreciation
- Manufacturer support and incentives
- Excess mileage charges
Two vehicles may have similar monthly payments but very different contract terms and overall costs.
That's why it's important to look beyond a single percentage.
To understand these factors in more detail, take a look at our guide on how car leasing payments are calculated.
Why the 1.5 Rule Doesn't Always Tell the Whole Story
The 1.5 rule can be helpful, but modern lease pricing is influenced by much more than the vehicle's list price. Funders and manufacturers consider:
- Forecast resale values
- Finance rates
- Manufacturer contributions
- Stock availability
- Contract length and mileage
This is why some premium vehicles can occasionally lease for less than expected, while others with lower list prices may cost more than you would anticipate.
For this reason, many leasing specialists prefer to compare the total cost of a contract rather than relying solely on the monthly payment.
What's a Better Way to Compare Lease Deals?
When comparing lease offers, focus on the overall package rather than the monthly payment alone.
Consider:
- The total amount payable over the contract
- The annual mileage allowance
- The initial rental required
- Whether maintenance is included
- The vehicle's specification and equipment levels
Comparing like-for-like contracts will give you a much clearer picture of value.
If you're actively searching for your next vehicle, browse our latest car leasing special offers to compare current deals across a wide range of manufacturers and models.
Why Do Some Lease Deals Beat the 1.5 Rule?
Some lease deals fall well below the 1.5% benchmark.
This is usually because:
- The manufacturer is offering additional support
- The vehicle has strong predicted resale values
- Promotional finance rates are available
- Stock vehicles are being discounted
These factors can create particularly attractive leasing opportunities for drivers looking to maximise value.
Should You Use the 1.5 Rule?
The 1.5 rule is a useful starting point, especially if you're comparing several vehicles and want a quick way to assess value.
However, it should never be the only factor in your decision.
The best lease deal is one that balances affordability, contract terms, mileage requirements and the vehicle that's right for your lifestyle or business.
Businesses comparing company vehicles may also benefit from reading our business car leasing guide, while drivers considering an EV can explore our electric car leasing guide for information on charging, running costs and available models.
