Lease to own a car (UAE): what it really costs
Updated
Lease to own ("rent to own") is advertised as "no down payment, no interest". The interest is still there: it is the difference between everything you pay and the car's cash price. A AED 80,000 car at AED 2,100 a month for 48 months plus a final payment of AED 20,000 costs AED 120,800 — AED 40,800 more than cash, a real yearly rate of about 18.8% before counting anything the monthly payment includes.
| Lease to own | |
| Paid at signing | – |
| Monthly | – |
| Final payment to own the car | – |
| Everything you pay | – |
| Of which included services (your estimate) | – |
| The same car with a bank loan, 20% down | |
| Down payment today | – |
| Monthly | – |
| Insurance, maintenance etc. you pay yourself | – |
| Everything you pay | – |
| Lease to own costs you more | – |
Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.
How lease to own works
You pay a monthly amount for a fixed period — often two to five years — and at the end you pay an agreed final amount to take ownership. The final amount is set when you sign and is usually not covered by the monthly payments. Many offers need no down payment and no bank approval, and the monthly payment often includes insurance, maintenance or registration.
Why "no interest" is not free
A lease has no interest rate on paper, but you still pay for the money you did not have up front: everything you pay minus the cash price of the same car is the cost. This calculator turns that into a yearly rate, so you can compare it with a bank car loan. If the monthly payment includes insurance or maintenance you would otherwise pay yourself, enter what that would cost you — the rate is then shown for the car alone, and the bank loan is charged the same amount.
Outside the car-loan rules
The Central Bank treats operating leases to individuals as outside its car-loan regulation. The 80% limit and the 60-month limit do not apply — but neither do the caps on fees. The contract is your only protection. More in the car finance guide.
What the contract must show
- The final payment to own the car, in AED, and the date it is due.
- What happens if you do not pay it — whether you lose everything paid so far.
- The mileage limit and the charge per extra kilometre.
- The cost of ending early.
- Who pays for insurance, maintenance, registration and repairs — and the excess on the insurance.
- Who owns the car until the final payment, and what you must return it in.
Questions people ask
Is lease to own really interest-free?
In the UAE, not in cost. Everything you pay minus the cash price of the same car is what the lease costs you; the calculator shows it as a yearly rate.
Is the final payment included in the monthly payments?
Usually not in the UAE. It is agreed when you sign and due at the end. If you do not pay it, the car goes back — check what the contract says about the money you have paid.
Do the Central Bank car-loan rules apply to a lease?
No — in the UAE, operating leases to individuals are outside the car-loan regulation: no 80% limit, no 60-month limit, but also no caps on fees.