The terms, lease-purchase or lease-to-own, as related to car leasing are not very appropriate, and are often misused in this regard. These are terms more appropriate to real estate or furniture sales. However, some used car dealers offer what they call “lease” or “lease-to-own” vehicles, which are actually high finance rate purchases or expensive rentals.

Car leasing is an alternative method of financing. Purchasing with a loan is the other method. However, these two methods are never combined, contractually. In this sense, there is no such thing as an automobile lease-to-own agreement.

Even though most car lease contracts provide for an early buyout or lease-end purchase of a leased vehicle, the purchase transaction is separate and distinct from the lease transaction. In fact, a lease contract must be terminated before a purchase is transacted. Lease payments do not contribute to the purchase of a leased vehicle.

If a consumer knows at the beginning of a lease that they will want to purchase their vehicle at lease-end, it is less costly to simply purchase to start.