Best Budget Lease Cars
By AlexWith the cost of living increasing, it is understandable that many households are looking to tighten their budget. While many see a car as a necessary expense to get to work and school, costs can spiral if they don't budget properly.
According to the BBC, petrol prices increased by 9.4% from June 2021 to 2022, peaking in July at 191.53p for petrol and 199.07p for diesel. Car prices have also shot up. Used car prices increased on average by 30% in 2021, whilst new car prices are expected to rise by 3.1% in 2022 (Car Dealer Magazine).
To help keep money in your pocket, Nationwide Vehicle Contracts has put together a comprehensive guide listing the best lease cars for different budgets. In this guide, we look at:
- Best budget lease cars for £400pm
- Best budget lease cars for £600pm
- Best budget lease cars for £750+pm
We've considered not only the monthly cost of leasing the car but also the average price of insurance (based on a 30-year-old driver) and a fuel budget of £75 per month, which allows for a daily commute of 15 miles and 25 miles of driving on the weekend.
It's worth noting that we have excluded the cost of maintenance as it doesn't typically count in the monthly budget, however, a vehicle maintenance package may help save costs long term.
Best budget lease cars for £400pm
First up are the top three picks for the best budget lease cars for £400 a month. We've picked car leasing models that are not only fuel efficient and reasonably priced to insure but are also some of the most desirable cars on the market.
Top three budget lease cars for under £400 a month
Ford Fiesta Hatchback
The Ford Fiesta is one of the most popular cars in the UK, and it's easy to see why. It's a great-looking car, cheap to lease, and very economical to run. It's also a very reliable car, which is essential if you plan on using it for your daily commute.
Why does it make a good budget car?
The Ford Fiesta is a great car to lease if you're on a budget. It's cheap in terms of fuelling, servicing and maintenance, making it a frugal choice. The Fiesta is also a great car to drive. It's comfortable, has a good range of standard equipment, and looks great to the eye.
Is it economical?
If you're choosing your lease car based purely on economy, the Ford Fiesta's EcoBoost engines won't let you down, with most units returning above 50mpg. The cheapest EcoBoost petrol 1.0-litre 100PS unit returns a competitive 51mpg, whilst more mid-range choices that integrate hybrid technology will see their figures increase to around 56.5mpg.
Insurance costs and group:
The entry-level Fiesta falls in insurance group four, which will set you back around £52 a month. If you were to go for a mid-range model, such as the Fiesta Titanium with the 100PS EcoBoost engine, prices would increase by about £8 a month. A top-of-the-range engine in group 28 would cost around £75 a month.
- Insurance Group: 4-28
- Average Monthly Insurance Costs: £52-£75
- Fuel budget: £75 per month
Volkswagen Polo
The Volkswagen Polo is another excellent option for a budget lease car. It's a stylish little car that's cheap to run and insure; it's fuel efficient and very reliable. It's slightly more expensive to lease than the Fiesta, but it's still very reasonable.
Why does it make a good budget car?
The VW Polo was the third best-selling car in the UK in 2021, and it's clear why. It's reliable, economical, and easy to drive, making it one of the most premium cars in its class. There aren't many better options for those on a budget than the Polo.
Is it economical?
The Polo's economy will please any driver. Volkswagen claim that all their 1.0-litre TSI engines exceed 50mpg. The 95PS unit with a 5-speed manual reaches 54.3mpg, whilst for the 7-speed DSG, it decreases to 51.4mpg.
Insurance costs and group:
The recommended 1.0 litre 95PS engine slots into insurance groups 9 or 10, costing the driver an average of £52 a month. The cheapest option is the 80PS engine which sits in insurance group 3 and would cost an average of £50 a month, whilst the range-topping Polo GTI with its 2.0 litre 207PS engine is in group 23, costing an average of £70 a month.
- Insurance Group: 3-23
- Average Monthly Insurance Costs: £50-£70
- Fuel budget: £75 per month
Nissan Qashqai
The Nissan Qashqai is one of the most sought-after mid-sized SUVs on the market, and it's perfect for families on a budget. The Qashqai comes with a good range of standard equipment and is available on some great lease deals through Nationwide Vehicle Contracts.
Why does it make a good budget car?
The Qashqai is one of those cars you see everywhere on the roads. The reason for this is that it's an extremely well-rounded car. It's spacious, economical, and reasonably priced - perfect for families looking to reduce their overheads. Nissan also uses mild hybrid technology for the Qashqai, reducing running costs.
Is it economical?
The Qashqai won't blow you away with economy, but it still offers competitive returns. The less powerful mild-hybrid petrol engines can achieve up to 45mpg, while the top-of-the-range e-Power model reaches 53.3mpg.
Insurance group and cost:
The cheapest model, the Qashqai Visia, sits in insurance group 11, costing the driver around £60 a month. Some mid-range options vary from group 12 to 20, whilst top-of-the-range Qashqai Tekna+ with an ePower engine slots into group 26, costing the driver an average of £73 a month.
- Insurance Group: 11-26
- Average Monthly Insurance Costs: £60-£73
- Fuel budget: £75 per month
Best budget lease cars for £600pm
If you have a little more money in the budget to play around with, you have more options when it comes to leasing a car. Cars in this price bracket have a wider range of manufacturers, including prestige car brands and family-friendly cars.
Top three budget lease cars for under £600 a month
Ford Focus Hatchback
The Ford Focus Hatchback has been a mainstay on the roads of Britain for the last 20 years and is a great option for those looking for a budget lease car. The Focus Hatchback uses premium materials throughout and has up-to-date technology while maintaining its affordability.
Why does it make a good budget car?
The Ford Focus is one of those cars that will never go out of fashion; it's got a slick exterior with a simple yet practical interior, fitting any driver's needs. For those on a budget, the Focus Hatchback has superb fuel economy, is reliable, and is reasonably priced to insure. Also, as it's a Ford, it's relatively cheap to service and maintain, with parts coming at a lower price than other manufacturers.
Is it economical?
The standard engine options for the Focus Hatchback are a 1.5-litre EcoBoost petrol engine with mild-hybrid technology and a 1.5-litre EcoBlue diesel option. The petrol engine can reach between 52mpg and 54mpg, whilst the diesel option can achieve an impressive 61.4mpg on the combined cycle.
Insurance group and cost:
The entry-level Focus Hatchbacks sit in insurance group 12, which costs around £61 a month. Most mid-range models rank around group 16, while the most expensive ST sits in group 27, costing about £74 a month.
- Insurance Group: 12-27
- Average Monthly Insurance Costs: £61-£74
- Fuel budget: £75 per month
Hyundai Tucson
The Hyundai Tucson is a good alternative to some premium family SUVs that make the class competitive. It's spacious, incredibly practical, and can be run on a tight budget. It has a range of hybrid engines, good interior design and quality, and low insurance and running costs.
Why does it make a good budget car?
The Hyundai Tucson range features mild, plug-in, or full hybrid technology, meaning that running and insurance costs are low for a family SUV. Also, the Tucson comes with a five-star safety rating and five years of warranty cover, meaning that you won't be hit by excessive maintenance costs. The Tucson would also be a good choice for a budget company car, with the plug-in hybrid returning low CO2 and good electric range.
Is it economical?
The Tucson is relatively fuel efficient. The entry-level Tucson SE Connect comes with a 1.6-litre 150ps petrol engine and manages a combined 41.5mpg. If you choose a mild-hybrid engine, the dual-clutch system offers better economy at 43.5mpg. An average of nearly 50mpg rewards those willing to pay a bit more for a full-hybrid engine.
Insurance group and cost:
The Hyundai Tucson's cheapest model sits in group 12, which costs about £61 a month. The mild-hybrid engines occupy groups 15-18, whilst the full-hybrid engine in the Ultimate model slots in group 20, costing on average £68 a month. This is low for a family SUV, with most premium manufacturer's insurance groups ranging from 20-35.
- Insurance Group: 12-20
- Average Monthly Insurance Costs: £61-£68
- Fuel budget: £75 per month
Kia Sportage
The Kia Sportage is one of Kia's best-selling models in the UK and would be a good choice for a family SUV on a budget. It's got a massive boot space, good technology, and a range of petrol, diesel, and hybrid engine options to fit the needs of any driving style.
Why does it make a good budget car?
Typical to Kia cars, the Sportage is reliable, practical, and efficient, making it a solid choice if you're on a budget. The Sportage has a range of hybrid and plug-in hybrid engines, reducing day-to-day running costs for those behind the wheel. The Sportage would be an excellent choice for a company car, with its low CO2 output and good electric-only range putting it in the 8% benefit-in-kind tax band (BiK).
Is it economical?
The Sportage returns competitive figures when it comes to fuel economy. The entry-level 1.6 T-GDi ISG engine achieves 42.2mpg, which can be boosted to 44.1 mpg with the 48V mild-hybrid version. Diesel options are available, and the base 113bhp 1.6 CRDi achieves 53.3mpg.
Two full-hybrid options are available from the GT Line and up. The cheaper option is the 1.6-litre turbocharged petrol hybrid automatic which returns 48-49mpg, whilst the range-topping 226bhp version reduces efficiency to a combined 44.1mpg.
Insurance group and cost:
The Sportage's cheapest model ranks in insurance group 16, costing on average £66 a month. While most petrol variants sit between groups 17-20, the top-of-the-range full and plug-in hybrid options sit between groups 24-26, costing a maximum average of £73.50 monthly.
- Insurance Group: 16-26
- Average Monthly Insurance Costs: £66-£73
- Fuel budget: £75 per month
Best budget lease cars for £750+pm
Those with a bigger monthly budget will benefit from larger, more desirable models from prestige brands like Land Rover, BMW, Porsche and Tesla. Have a look at our recommendations below:
Top three budget lease cars for £750+ a month
Volvo XC40
The Volvo XC40 is a great option for those looking for a budget-lease car. It's fuel efficient and has low insurance premiums. It's also typical of a Volvo and is very well built, so it should last you a long time.
Why does it make a good budget car?
The Volvo XC40 would be a good choice for those who can afford higher monthly payments but still want a reliable return on their investment. As always with Volvo cars, the XC40 would be a dependable choice for a family SUV and wouldn't disappoint you. Inside the car, Volvo blends practicality with class. There's a good amount of cabin space for the whole family, which is complemented by stylish and high-quality equipment.
Is it economical?
Volvo has all options covered for the engine, with petrol, hybrid and fully electric versions available. The plug-in hybrid options offer the best fuel economy. Volvo claim they can achieve between 112mpg-139mpg, which is exceptional, whilst the cheaper 2.0 B3P Core petrol unit returns a combined 42.1mpg. The XC40 is one of the better choices for a company car. If you choose the plug-in hybrid T5 Recharge engine, you'll get low CO2 emissions which fit into the 12% tax group.
Insurance group and cost:
The XC40 sits in the insurance groups you'd expect for a more premium SUV. The entry-level model is ranked in group 18, costing on average £67 a month. For the top of the range model, it sits in group 32, so expect to pay around £75 a month.
- Insurance Group: 18-32
- Average Insurance Costs: £67-£75
- Fuel budget: £75 per month
BMW 3 Series Saloon
The 3 Series is one of BMWs best-selling cars, and it's not hard to see why. It blends style and performance with reliability and practicality, making for an all-round good driving experience. The 3 Series is available as a four-door Saloon or a five-door Touring Estate car.
Why does it make a good budget car?
The BMW 3 Series offers decent economy returns across various engines, competitive insurance rates, and a safe and secure ride. The 3 Series received a five-star rating from Euro NCAP whilst also coming with a three-year warranty with unlimited mileage, which is very generous for its class.
If you want to impress your clients with a classy and stylish car, the 3 Series would be an excellent choice for a company car, with the 330e engine coming with a 10% BiK insurance rate. You won't find much better for a vehicle of a similar calibre.
Is it economical?
Economy returns for the 3 Series depend massively on how you drive and your chosen engine. If you want to have a bit more fun behind the wheel, you'll likely see less bang for your buck in terms of fuel consumption.
The most economical choice is the 320d SE mild-hybrid engine, which BMW claims can achieve 61.4mpg. If you add xDrive to the spec, which comes with four-wheel-drive, you'll see returns drop to 57.6mpg. The most efficient petrol engine is the entry-level 320i which returns a combined 43.5-44.1mpg.
Insurance group and cost:
The BMW 3 Series sits in competitive insurance groups for a car of its class, ranging from group 24 to 42. The entry-level 320i petrol engine starts in group 24, costing the driver an average of £71 a month. The premium M430d xDrive sits in group 42; this will set you back around £85 a month.
- Insurance Group: 24-42
- Average Monthly Insurance Costs: £71–£85
- Fuel budget: £75 per month
Land Rover Discovery Sport
The Land Rover Discovery Sport is the manufacturer's best-selling car and a good choice for families who don't mind spending more on a bit of class. The Discovery Sport is spacious, reliable, and a more affordable option compared to some of its competitors.
Why does it make a good budget car?
The Land Rover Discovery Sport is one of the most reliable and practical SUVs out there. Under the bonnet, there is plenty of parts from other models, meaning that finding replacements should be quick and relatively cheap. The Discovery Sport also comes with mild and plug-in hybrid options, keeping running costs as low as possible.
Is it economical?
All Land Rover Discovery Sport versions with an automatic gearbox use mild (MHEV) or plug-in hybrid (PHEV) technology. All MHEV engines can power the car's ancillaries through the electric battery, meaning that the engine can be switched off to save fuel when decelerating. Land Rover claims that all diesel units return above 40mpg, while petrol options achieve around 30mpg.
The most economical is the plug-in hybrid, which can travel up to 37 miles on electric power alone. If fully charged, the P300e AWD Automatic PHEV can return up to an impressive 176mpg.
Insurance group and cost:
Insurance groups are as expected for the Land Rover Discovery Sport, sitting between groups 33 and 42. This is cheaper than some of its rivals, thanks to part availability and advanced engine technology. Looking at the entry-level model in group 33, you can expect monthly payments of around £74. The top-of-the-range trim with the P300e PHEV engine costs an average of £90 monthly.
- Insurance Group: 33-43
- Average Monthly Insurance Costs: £74–£90
- Fuel budget: £75 per month
Looking to lease a budget-friendly car?
Nationwide Vehicle Contracts has a range of car lease deals available to fit every price range. Our lease deals include the manufacturer's warranty, breakdown cover, road tax, and free mainland GB delivery (exclusions apply).
If you'd like to find out more, visit Nationwide Vehicle Contracts or contact one of our car leasing experts at 0345 811 9595.
Guide Information
Originally published: 28th October 2022
Last updated: 28th October 2022
