Car Hire Purchase 2026
A finance lease for your car – you pay monthly instalments and become the full owner at the end of the contract. Interest from 1.45% + EURIBOR, term 12–84 months.
Car hire purchase (finance lease) is the most popular way to finance a car in Lithuania. In 2026, over 60% of new and used cars are bought through leasing products. Unlike an operating lease, the car becomes your property when the contract ends – this is the key and most important difference.
How Does Car Hire Purchase Work?
You Choose
Pick a car – new or used up to 10–15 years old
The Bank Buys
The bank or leasing company buys the car on your behalf
You Pay Instalments
You pay monthly instalments according to the schedule set in the contract
You Become Owner
Once you pay the residual value, the car becomes your property
Hire Purchase Pros and Cons
Pros
- +The car becomes your property at the end of the contract
- +No mileage limits — drive as much as you want
- +Lower interest than a consumer loan (from 1.45%)
- +You can choose any car from any seller
- +For business: option to deduct VAT and assign expenses to costs
- +You can buy out the car earlier than agreed
Cons
- −The car belongs to the bank until fully paid off
- −Mandatory KASKO insurance for the entire contract period
- −A down payment is required (usually 10–25%)
- −Higher monthly instalments than an operating lease
- −The depreciation risk falls on you, not the bank
- −If you miss payments — the bank can repossess the car
Hire Purchase vs Operating Lease vs Loan
| Criterion | Hire Purchase | Operating Lease | Loan |
|---|---|---|---|
| Car after contract | Your property | You return it | Your property |
| Monthly instalment | Medium | Lowest | Highest |
| Mileage limit | None | 15–25k km/yr | None |
| Down payment | 10–25% | 0–10% | Optional |
| KASKO insurance | Mandatory | Included | Optional |
| Interest (from) | 1.45% | None (fixed) | 4.5% |
| VAT deduction (business) | Partial | Full | No |
| Depreciation risk | Yours | The company's | Yours |
Hire Purchase: Bank Comparison 2026
In Lithuania, all major banks offer car hire purchase. Here are their terms:
| Bank | Interest from | Term | Down payment | Amount |
|---|---|---|---|---|
| Swedbank | 1.45% + EURIBOR | 12–84 mo. | from 15% | €3,000–100,000 |
| SEB | 1.75% + EURIBOR | 12–72 mo. | from 15% | €3,000–80,000 |
| Luminor | 2.29% + EURIBOR | 12–84 mo. | from 10% | €2,000–75,000 |
| Citadele | 2.49% + EURIBOR | 12–72 mo. | from 15% | €3,000–70,000 |
| Bigbank | 3.49% + EURIBOR | 6–96 mo. | from 10% | €7,000–75,000 |
| Mogo | 3.99% | 12–84 mo. | from 0% | €2,000–15,000 |
* Base interest rates shown. Exact terms depend on the car's age, value and the client's creditworthiness. Updated March 2026.
Hire Purchase Calculation Example
What a typical hire purchase for a used car looks like:
Initial data
Result
Who Is Car Hire Purchase For?
Suitable if:
- • You plan to use the car for more than 3 years
- • You want the car to become your property
- • You don't want mileage limits
- • You have stable income and can make regular payments
- • You can set aside 10–25% for a down payment
- • For business: you want to deduct VAT and depreciation
Consider alternatives if:
- • You change cars every 2–3 years (an operating lease may be better)
- • You have no down payment and don't want to pay higher interest
- • Your income is unstable or seasonal
- • You need the car for a short period
- • You don't want to deal with selling it in the future
- • A business operating lease may suit you better because of VAT
Used Car Hire Purchase
Most Lithuanian banks finance not only new but also used cars through hire purchase. It is one of the most popular ways to acquire a quality used car without spending the entire amount at once.
Requirements for used car hire purchase:
- Car age — up to 10 years (some banks up to 15 years by the end of the contract)
- Minimum amount financed — from €2,000 (depends on the bank)
- Down payment — usually from 10–20% of the car's value
- Interest — 1–2 percentage points higher than for new cars
- Car valuation — carried out by the bank or an independent appraiser
- KASKO insurance — mandatory for the entire contract period
Tip: before submitting an application to the bank, check the car's history via a VIN check — this protects you from cars with rolled-back mileage or hidden defects. Also use the car valuation calculator to make sure the price matches the market value.
Frequently Asked Questions About Hire Purchase
What is hire purchase?
Hire purchase (also called a finance lease) is a car financing method where a bank or leasing company buys the car you chose and 'leases' it to you for the contract period. You pay monthly instalments, and at the end of the contract, after paying the residual value, you become the full owner of the car.
How does hire purchase differ from an operating lease?
The main difference: with hire purchase you become the owner at the end of the contract, while with an operating lease you return the car. Hire purchase: higher monthly instalments, but the car is yours. Operating lease: lower instalments, mileage limits, but no depreciation risk. For business, hire purchase is often beneficial because of the VAT deduction option.
What interest rates apply to hire purchase in 2026?
In 2026, banks in Lithuania offer: Swedbank – from 1.45% + EURIBOR; SEB – from 1.75% + EURIBOR; Luminor – from 2.29% + EURIBOR; Citadele – from 2.49% + EURIBOR. The exact interest depends on the car's age, the size of the down payment and your creditworthiness.
What is the minimum down payment for hire purchase?
Most banks require a 10–20% down payment. Some companies (e.g. Mogo) offer hire purchase with no down payment, but in that case the interest is higher and the monthly instalments are larger. The recommended down payment is 15–25%, which reduces the monthly burden and the total financing cost.
Can the car be bought out earlier?
Yes – most leasing contracts allow early buyout. You need to pay off the remaining principal and, depending on the bank, an early termination fee (usually 1–2% of the remaining amount). Before terminating the contract, calculate whether it is worth paying the fee or simply finishing the contract.
Can you get hire purchase for a used car?
Yes – most banks finance used cars up to 10–15 years old (by the end of the contract). The minimum car value is usually from €2,000–3,000. For used cars, interest is 1–2 percentage points higher than for new ones, and a car valuation is mandatory.
What documents are needed for a hire purchase application?
For individuals: an ID document, an income certificate or Sodra statement (3–6 months), car details (make, model, price, seller). For companies: company registration documents, financial statements, the manager's ID document. Most banks let you submit the application online.
What happens if I can't make the payments?
If you run into financial difficulties, first contact the bank — you can often get a payment deferral (1–3 months) or change the payment schedule. If you fail to pay for a long time, the bank has the right to repossess the car, and you will lose the instalments paid and the down payment.
Related calculators and services:
- Leasing calculator – calculate your monthly instalment in 30 seconds
- Car maintenance calculator – find out your real monthly costs
- Business leasing for companies – operating lease with VAT deduction
- Leasing with residual value – lower instalments, flexible choice at the end
- Leasing vs loan – full comparison
- Car leasing: bank comparison 2026
Calculate Your Hire Purchase Instalment
Use our free leasing calculator and find out the exact monthly instalment based on your car's price.