Starting July 1, 2025, leasing a car in Denmark will become more affordable. The Danish Motor Vehicle Agency (Motorstyrelsen) has announced a reduction in the interest rate applied to the proportional registration tax, the system used to tax leased vehicles in Denmark.
In practice, this means that consumers will now pay a lower interest rate on the portion of the tax paid in installments. The interest rate will drop from 5.4% to 4.6%, marking the second reduction within a year. This shift is particularly notable after several years of increases: in both 2022 and 2023, the rate was raised after remaining unchanged for over a decade.
According to Motorstyrelsen, the interest adjustment reflects the declining underlying lending rates, which the agency uses as a benchmark. As these market rates drop, the state is following suit by lowering its own.
The importance of this change for car leasing
In Denmark, leased vehicles are not taxed with the full registration fee upfront, as is the case with outright purchases. Instead, a portion of the tax is paid periodically, with the amount depending on the car’s age and length of the lease agreement. Older vehicles are taxed at a lower rate—cars older than three years, for example, pay just 0.5% at a time—but these periodic payments are subject to interest.
With the upcoming interest reduction, monthly leasing costs will decrease, especially for high-value vehicles with a large residual tax base. While the exact savings vary depending on the car model and contract terms, the impact is expected to be noticeable across the market.
This change affects new leasing contracts signed from July 1, 2025 onward. However, customers renewing a lease in 2025 will also benefit from the reduced rate. For drivers considering a new lease, this might be the right time to act.
