Hi, Miles here. You are changing cars and the dealer has handed you three offers that cannot be compared. That is normal: they do not measure the same thing. Let me lay it all out, with a four-year worked example and the costs nobody puts on the front page.
The three options, one sentence each
Buying, outright or with a loan. You own the car. It is yours, you sell it whenever you want, and you keep whatever it is still worth.
LOA (location avec option d’achat), the French lease-purchase. You rent for three or four years, with the option — not the obligation — to buy the car at the end, at a price fixed on day one.
LLD (location longue durée), long-term rental. You rent, full stop. At the end you hand back the keys. Servicing and roadside assistance are often included in the rent.
The real difference is not “owner versus renter”. It is somewhere else: who carries the risk on the resale value? When you buy, you do. With LLD, the rental company does. With LOA, you decide at the end whether you want to carry it.
The only figure that matters: cost of ownership
Comparing monthly payments is pointless. A loan instalment builds an asset; a rent payment does not. The right measure is the cost of ownership: everything that leaves your pocket over the period, minus whatever you get back at the end.
Take a car at 30,000 € new, kept for four years, 15,000 km a year.
Four-year loan
Around 691 € a month at 5 %, so 33,162 € paid in total, of which 3,162 € is interest. You sell the car for 15,000 € after four years.
Cost of ownership: 33,162 − 15,000 = 18,162 €, roughly 378 € a month.
Four-year LOA
A 3,000 € deposit, 349 € a month, a 12,000 € purchase option you decide not to take.
Cost of ownership: 3,000 + (349 × 48) = 19,752 €, roughly 411 € a month. And you have no car at the end.
Four-year LLD
419 € a month with servicing and assistance included, no deposit.
Cost of ownership: 419 × 48 = 20,112 €, or 419 € a month. But servicing is inside that figure — count 1,200 to 1,800 € over four years that the other two scenarios have not paid yet.
What the example is really saying
Once servicing is put back in, the three options sit within 50 € a month of each other. Buying keeps a small edge — and one big “if”.
That “if” is the resale. I assumed 15,000 € after four years. If the used-car market turns, or if the model depreciates faster than expected, you get 11,000 € instead of 15,000 € and buying becomes the most expensive option. With LLD, that risk is not yours: that is exactly what the rent is buying.
You can run this calculation with your own numbers in the buy or lease calculator.
Hidden costs, option by option
When you buy
- Depreciation. By far the biggest item, and it never appears on an invoice. A new car often loses 20 to 25 % of its value in the first year.
- Out-of-warranty repairs, which turn up precisely when the warranty ends.
- Tied-up cash if you pay outright: that money is no longer working elsewhere.
With LOA
- Arrangement fees on signature.
- The mileage cap. Go over it and you pay for every extra kilometre, usually between 0.10 € and 0.20 €. On a 10,000 km overrun, that is 1,000 to 2,000 €.
- Return charges. Scratches, worn tyres, a marked interior: the reconditioning grid is strict, and it applies if you do not take the purchase option.
- Fully comprehensive insurance, generally required by the contract.
With LLD
- The same mileage and return penalties as LOA.
- No residual value. After four years of rent, you have nothing.
- Early termination, which is expensive. If your business changes, you are still committed.
The tax question almost nobody asks
If you deduct your car costs using the French mileage allowance scale, the way you financed the vehicle matters far less than you would think.
The scale is a flat rate. It already covers fuel, servicing, tyres, insurance and depreciation. The direct consequence: your LOA or LLD rents are not deductible on top. The flat rate is deemed to have absorbed them.
There is one exception, and it leans towards buying: interest on a loan taken out to buy the vehicle is claimed on top of the scale, in proportion to business use. So are tolls and parking. If you are not sure how that flat rate works yet, start with the mileage allowance guide linked at the bottom of this page.
In other words: the buy-versus-lease decision plays out on real cost of ownership, not on a hidden tax advantage.
How to choose, in practice
Choose buying if you keep your cars a long time (six years or more), if you drive a lot, or if you hate the idea of being tied to a contract.
Choose LOA if you want a low monthly payment while keeping the door open. It is the compromise: you decide at the end, once you know what the market really looks like.
Choose LLD if you want a smooth budget and zero surprises, if you change cars every three or four years, and if your annual mileage is stable and predictable.
And whatever you do, answer the one question that matters first: how many kilometres are you really going to drive this year? That number decides the cap you should negotiate, the model that makes sense and what you will get back on resale. Most people get it wrong. Measure it properly and you negotiate better.
Frequently asked questions
Is LOA more expensive than a loan?
Over the life of the contract, almost always a little, yes. You are paying for flexibility and for a guaranteed buy-back. The gap narrows if the car depreciates faster than the contract assumed: in that case, walking away from the option is a good deal.
Can I exit an LOA or LLD early?
Yes, but rarely for free. You either buy the vehicle out early or pay a termination fee. Read that clause before you sign, not after.
What happens if I go over the agreed mileage?
You pay for every extra kilometre at the rate written in the contract. Some rental companies will revise the cap mid-contract, often for less than the penalty. Ask as soon as you can see the overrun coming.
Does going electric change the comparison?
Yes, in both directions. Electric cars long depreciated faster, which argues for renting. But on the tax side, the French mileage scale adds 20 % to your allowance, which improves the return on a vehicle you use heavily for work.
Me, I take care of the starting number: I count your business kilometres from your calendar, month after month. You finally know what your car earns you — and what it really costs.