What is the difference between Hire-purchase and Lease in car finance?
In a Hire-purchase agreement, the person who has taken the loan becomes the owner of the car at the end of the tenure when he has paid all the instalments. He also avails of the tax benefits in terms of depreciation on the asset, i.e. the car. In a lease agreement, the owner is still the car finance company and they have the tax benefit on depreciation; at the end of the lease term, the asset is back with the company.The finance companies can pass on the benefit to the customer in terms of less lease rentals.
