What is finance lease?

A lease agreement allows you to own a car by paying instalments of lesser amount than what you would have to pay if you purchased the car by taking a loan from a bank. This is because the car is legally owned by the seller, but is in a way loaned to you till you pay the instalments and buy the car at the end of the agreement period by paying the depreciated value of the car.

This financing option would help you because you of the flexible financing options that this agreement comes with. Qualification terms for a lease agreement are much easier than for a loan, and many instalment options are provided according to the lease period which could be on a fixed interest or a variable interest. You cannot end the agreement if you want to unless and until such an option is provided in the agreement (which is usually not). The seller will be able to recover the depreciation value of the car over the period of the lease agreement which is unlike the hire purchase agreement.

Here’s the disclaimer.

The thing that you should care about here is that if you can really afford to own an expensive car. The reason why these finance options are offered to you is that the risks associated with it rests on you, not the seller. You pay the taxes, the maintenance bills and any extra costs that you may incur. It may be easier to avail a finance lease from a manufacturer than a loan, but the terms are no different.