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Cars on Installments vs Cars on Lease

Hello everyone,

I am looking for getting a car, so firstly I want to understand the methods of obtaining car here in Saudi Arabia.
First I was considering to buy a used car under the budget of 10,000 SAR but then I got to know that such car won't be in good service to use, so I dropped this idea.

On the other hand, I have been finding these two terminologies;
1. Car on Lease (which I found to be present most)
2. Car on Installments

Is it true that under "Car on lease", if e-g I obtain a car for a duration of 2 years then after the duration completed, I shall have to return the car to the company and it wont be my property?
& for
"Car on installments", if e-g I obtain a car for duration of 2 years then after the duration is completed, the car will become my property?

I just want to confirm these things, in order to not get myself in trouble by having less knowledge or information.

Thanks in anticipation.

These are two different types of contracts. With installment, car is transferred to your name but you need to provide a guarantor that will be responsible incase you fail to pay installment. With lease, the car remains the property of leasing company and will be transferred to your name after you have paid off all dues. Normally no guarantor is required for leasing option

tansari :

These are two different types of contracts. With installment, car is transferred to your name but you need to provide a guarantor that will be responsible incase you fail to pay installment. With lease, the car remains the property of leasing company and will be transferred to your name after you have paid off all dues. Normally no guarantor is required for leasing option

Wow, thats very nice. And can you confirm that in case of car leasing, after paying off all the dues (i,e monthly payments + final amount (if any), the car shall be transferred to my name completely free, as in I wont be charged anything extra?

Like e-g, by using the following calculator
http://www.uis.com.sa/calculator.aspx

If I buy the following on lease for a duration of 24 months, by paying 1000 SAR p.m
YARIS SEDAN STD 1.3 Sedan 4Dr Petrol Automatic 2014 SR47500

After 24 months,
paying off the 1000 * 24 = 24,000 SAR
Downpayment = 7,938 SAR
Last Payment = 17,888 SAR

This car would be completely my property and transferred to my name right?

Yes and talk to leasing agents they'll explain you all terms and conditions

tansari :

Yes and talk to leasing agents they'll explain you all terms and conditions

Oookay, Thank you. . . Thank you so much :)

There's a pain involved, better go for cash options. Just an advice :)

Hello blade,

Cars on installments and cars on lease are exactly the same thing. The interest rate and other conditions ( e.g age of the car, most banks prefer brand new cars, some allow op to 3 or four year)  differ from place to place so the best is to ask the bank.

In principle the bank owns the car and you pay the RENT to use it.

Leasing is in principal " hypothecation " of property and the leaser remains the owner until lessee has paid all the installments.

Upon completing the installments, the car does not automatically become your's. In some cases the bank may demand say 5% as "transfer of ownership fees" so the best is to clarify this before entering into the lease agreement.

Amjad381 :

There's a pain involved, better go for cash options. Just an advice :)

Okay Sir :)
I do understand, and thats why am wanting to know all the risks+pains involved too :P

riazcdki :

Hello blade,

Cars on installments and cars on lease are exactly the same thing. The interest rate and other conditions ( e.g age of the car, most banks prefer brand new cars, some allow op to 3 or four year)  differ from place to place so the best is to ask the bank.

In principle the bank owns the car and you pay the RENT to use it.

Leasing is in principal " hypothecation " of property and the leaser remains the owner until lessee has paid all the installments.

Upon completing the installments, the car does not automatically become your's. In some cases the bank may demand say 5% as "transfer of ownership fees" so the best is to clarify this before entering into the lease agreement.

Okay. Its been a great help what you have told me. I was really confused about all these things, since I am new here and do not know anyone so I hardly get to find the answers to my questions here in Saudia Arabia.
Else than this, the communication gap causes a hindrance too most of the times.

Thank you so much once again. Because that is what I was exactly looking for to know :)

My friend if you are getting a car on lease, it means you are hiring a car on rent from any rental company.(lease is considered as rental in GCC)
But if you are applying for the car on installments then it will b under your name and it will be your property after the clearing all installments.

Good information in this thread. I had the same question,as im new in khober with fmly n need a car.
My experience is like this:
I askd the bank thy wantd 2/3months salary transferd in the bank thn thy wil go for it. And thn
I went to toyota showroom.
Thy ofrd very reasonable installment to yaris sedan 900 per month, wid zero down payment. At start i wud pay 3000 sar. 2000 for registration 1000 is 1st instalment n rest is 47. Tenure is 4 year. Aftr this there is a final payment n car is mine. I can take it to behrain as well.
Someone sugested to chk from autostar, its near raka on highway. Thy r much cheaper than this.
autostar.com.sa
I wil go thr also n thn take the desion.

Hello Syed,

Welcome to the EB.

First of all I request you to avoid using short hand english words for ease of reading ot our members.

Secondly, Toyota Yaris is an Okay car for with in city driving and buying your groceries etc. I suggest you look at the next step ie Corolla and even a used Camry, they are much safer and fun to drive specially if you are thinking of going to Bahrain occasionally.

Have a good time in Saudi Arabia.

and make sure that you can really travel to Bahrain or other neighboring countries with your leased car, usually it's not allowed.

kom340 :

and make sure that you can really travel to Bahrain or other neighboring countries with your leased car, usually it's not allowed.

It's allowed my friend but you should revised the owner of the car to have authorisation, I made one from KIA valid for one year to access any gulf countries with 500 S.R only

Indeed helpful, I have another connected question:

Does transfering an already leased or on installement vehicle form toyota Abdul Lateef jameel is a smooth process?

Moderated by Christine 2 days ago
Reason : off topic + please do not put your contact details on the forum. Thank you
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