A loan implies that a client borrows money to buy a car from a bank at a certain interest rate. At the same time, he or she bears all the costs of insurance, maintenance, and repair of the car. The owner of the vehicle cannot sell it until the loan is repaid, and a legal entity does not always have the right to use the car in commercial activities.
A lease is a service of providing a car for use. The car is purchased by the leasing company and will be registered with it. The client uses the car by making regular monthly payments. At the end of the term, the client can buy the vehicle if he or she wishes.
Operating and financial lease should be distinguished. The first option involves an initial payment (approximately 30% of the cost of the car). Then the cost of the car (minus the down payment) is fully depreciated over the term of the contract. At the last payment, the client buys the vehicle. In this case, you cannot freeze payments or terminate the contract ahead of time. At the end, the car becomes the property of the client. The client bears the cost of car maintenance. The risks of operating the car, its subsequent sale, or upgrading are entirely on the client.
Operating lease is a more flexible option. In this case, the client is not obliged to buy back the car, can terminate the contract early or change the car. Only a guarantee fee is required (usually 2-5 monthly payments), which can be transferred to another leased car, included in the purchase price, or returned after the expiration of the contract.