Leasing

How does a car lease differ from a car loan?

Car leasing is a loan for the purchase of a car with the vehicle as collateral. When you purchase a car using leasing, the leasing company becomes the owner, and the buyer is registered as the car’s user. Only after all leasing obligations have been fulfilled will the car’s ownership rights be re-registered from the leasing company to the customer.

In turn, a car loan is a loan for the purchase of a car which becomes the property of the purchaser as soon as the purchase has been made. In most cases, interest is higher for car loans than for leasing, and most car loans have purchase price limit.

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