What is the difference between leasing and buying a car?

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Contract hire and leasing is a contract between the customer and dealership that involves the customer paying an initial down payment in return for the hire of a brand-new vehicle across an agreed amount of time. The customer will pay set monthly payments throughout the agreed time and at the end of the car or van leasing contract term, the customer will hand the vehicle back to the dealership. Car and van leasing is essentially the long-term hire of a new vehicle.

There are several options a customer can choose between when buying a car, all of which usually involve the customer owning the entire vehicle at the end. The most popular means to buying a car are: Personal Contract Purchase (PCP), Hire Purchase (HP) and Cash Purchase.

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