Car Lease Calculator

Frequently Asked Questions About Car Leasing

• What is car leasing?

  Car leasing is a way of financing a vehicle where you pay a fixed monthly amount over an agreed period instead of paying the full price upfront. At the end of the lease, you can usually choose to either keep the car by paying the agreed residual value, or return it to the leasing company.

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• What is the difference between an operating lease and a finance lease?

  With an operating lease, the vehicle remains the property of the leasing company throughout the term — you pay for the use of the car, not for ownership. At the end of the term, you can return the car or keep it by paying the agreed residual value. With a finance lease, you move towards ownership right away: once you pay the final residual payment at the end of the term, the car becomes yours. An operating lease suits those who prefer flexibility and less responsibility for the car’s future value; a finance lease suits those who definitely want to keep the car.

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• Why can’t I choose an operating lease when buying from a private seller?

  With an operating lease, the seller commits to buying the vehicle back at an agreed residual value at the end of the lease term, if the buyer does not keep it. Only an established car dealer, who runs an ongoing business and has the capacity to resell vehicles, can take on this buy-back obligation — a private seller cannot offer this. That is why banks can only offer operating leases for vehicles listed by car dealers. When buying from a private seller, you can use a finance lease or a regular car loan instead.

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• What is a full-service lease?

  A full-service lease is a form of operating lease where the monthly payment includes, in addition to financing, other services such as maintenance, insurance and tyre changes. This gives you one fixed monthly payment that covers most of the costs of running the car, and it is especially well suited to companies who want to manage a vehicle fleet without unexpected extra costs.

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• Is car leasing suitable for companies too?

  Yes, car leasing is a very common way for companies to finance a vehicle. For business leasing, the tax treatment also matters: with an operating lease, the vehicle usually stays on the leasing company’s balance sheet, while with a finance lease, the vehicle is recorded on the company’s own balance sheet. VAT recovery and fringe benefit tax rules depend on how the vehicle is used (whether it is used 100% for business or also privately). For detailed tax questions, it is worth consulting an accountant or tax advisor.

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• Can I get leasing for buying a used car as well?

  Yes, both operating and finance leases can be used to buy a used vehicle as well. For used cars, leasing companies may set restrictions on the vehicle’s age or mileage, and the interest rate may be slightly higher than for a new car. However, an operating lease still requires the seller to be a car dealer who can take on the buy-back obligation — when buying from a private seller, you need to choose a finance lease or a car loan instead.

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• What is the residual value in leasing?

  The residual value is the amount left unpaid on the vehicle at the end of the lease term — it works like a larger final payment, which, once paid (or, in the case of an operating lease, once the car is returned), ends the lease agreement. A higher residual value means a lower monthly payment during the term, but a larger payment at the end. The size of the residual value directly affects the monthly payment shown by the calculator.

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• How large does the leasing down payment need to be?

  The size of the down payment depends on the leasing company, but it is usually between 0–20% of the vehicle’s price. A larger down payment reduces the monthly payment and the total interest paid over the lease term. Some leasing companies also offer leasing without a down payment, but in that case the monthly payment and/or interest rate is usually higher.

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• What is the difference between car leasing and a car loan?

  With a car loan, you become the owner of the car immediately and repay the loan according to an agreed schedule — similar to a finance lease. With car leasing, especially an operating lease, the vehicle remains the property of the leasing company, and at the end of the term you have a choice: keep the car or return it. Leasing can be more cost-effective for those who change cars frequently, while a loan suits those who definitely want to own the car long-term.

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• Where can I get car leasing?

  Car leasing in Estonia is offered by several major banks, for example Coop Pank, Swedbank, SEB, LHV and Luminor. Terms (interest rate, down payment, residual value) vary between banks, so it is worth comparing a few offers before making a decision. Autoportaal’s leasing calculator helps you get an initial overview of your monthly payment, regardless of which bank you choose to approach.

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