The First Step Monthly Rent System Loan Schemes Hire Purchase EMI and Hire Purchase are the same, the only difference being that under Hire Purchase, the size of the installment was known to the hirer and interest was calculated in loan balances. Under the modern EMI, a much smaller amount is adjusted against the installment in repayment of the principal and much higher against interest liability. But the hirer does not know the adjustment and the lifetime cost and is happier to pay a fixed sum, an affordable EMI for the period committed. In both the cases, the vehicle is in the vehicle owner's possession, but the legal ownership rests with the financier. Under hire- purchase, it is automatically transferred to the buyer as soon as the last installment is paid, while under lease, a separate transaction of buying the lease expired car has to be made.
Depreciation is available to the buyer under hire purchase and to the financier under lease.
Leasing is another form of financing vehicles. The buyer pays a fully tax deductible fixed monthly rental - there is no need to segregate monthly installment and interest and there is no security deposit. Decide on your vehicle, and go for it.