Car rental: LOA (rent with option to buy) or LLD (long term rental)?

Verified 12 June 2026 - Public Service / (Prime Minister)

You can have a car without buying it, through a lease with an option to buy (LOA) or a long-term lease (LLD). What is the difference between LOA and LLD and which one to choose according to your situation? The LOA, also known as leasing, is treated as a consumer credit, whereas the LLD is a lease. We present you the essential information to know.

LOA

The LOA is also called leasing, rental-sale, rental with promise of sale or leasing.

It is a rental with the ability to buy the property at the end of the lease, at a price fixed from the outset.

This contract is widely used in the automotive field, but it can also be used for other capital goods (household appliances, machinery, etc.).

The LOA is offered by professional car sellers (dealer, garage, leasing business) or by banks or credit institutions.

The LOA allows you to use a vehicle for a certain period of time (between 2 and 7 years), in return for the monthly rent payments.

Some landlords also require the payment of a input or of a first rent increased. Thus, as a tenant, you can pay in several times and in different ways the price of the car: down payment or 1er increased rent, monthly rents and purchase price at the end of the rental.

Example :

For a car whose value mentioned in the contract is €10,000, you can pay for a 3-year contract:

  • €1,000 advance payment,
  • €7,200 of rents (€200 per month over 36 months),
  • €1,800 redemption price.

Total: €10,000.

At the end of the rental period, you have the option to buy the vehicle at the price set in the contract, but you are not obliged to do so.

Please note

Throughout the duration of the contract, the vehicle remains the property of the lessor or financial institution.

Before signing a lease with an option to purchase, it is advisable to check several elements.

In particular, you must consult the amount of the first increased rent, check the possible existence of a security deposit, consult the amount of the monthly rents, the authorized mileage, the fees that can be invoiced when returning the vehicle and the purchase price provided at the end of the contract.

It is also recommended to compare the total cost of the transaction with that of a purchase financed by a conventional credit.

To take a car in LOA, you must sign a contract with a business that offers this service.

The professional who offers an LOA contract is obliged to respect the consumer credit underwriting rules.

Information prior to the contract proposal

The leasing professional you contact makes a commercial proposal depending on your request (desired car model, contract duration, rent amount, contribution amount, etc.).

The professional examines your financial situation to see if you can meet your payment obligations, that is to say, pay the sums that will be borne by you in the event of the signature of the contract. Thus, he must consult the bank files to check if your name appears in the list of people who have had payment incidents.

The professional also has theobligation to inform you the characteristics of the proposed credit and the risks associated with a default. He has to give you a standardized pre-contractual form, a document that identifies important credit items, such as the interest rate, the amount of monthly payments and the cost of the loan.

If the professional decides, after a thorough examination of your situation, to respond favorably to your request, he must make you a written contract proposal.

Contract proposal

The contract proposal must be made in writing or on a durable support. And it must be separate from advertising material and the pre-contractual information sheet.

The contract must contain the essential elements of the LOA, in particular the following:

  • Contact details of the lender, lessor or lessor
  • Contact details of the borrower and sureties, if they exist
  • Description of the property concerned
  • Cash purchase price of the leased property
  • Duration of the rental operation (usually between 2 and 5 years)
  • Number of kilometers allowed
  • Amount remaining to be paid in case of purchase at the end of the rental
  • Amount of rents and their number
  • Warning regarding the consequences of a default by the borrower
  • Existence of a withdrawal period
  • Address of the Autorité de contrôle prudentiel et de résolution (ACPR) and that of the competent departmental directorate for the protection of populations (repression of fraud) in the event of a dispute
  • The total amount owed by the borrower over the lease period.

FYI  

The lessor shall ensure that the annual percentage rate of interest does not exceed wear rate.

Signature of the contract

To sign the contract, you must mark the ‘Read and approved’ on at least 2 copies of your lender's proposal, then date and the sign.

You must give a copy of the contract, dated and signed to the lessor.

Right of withdrawal

If you accept the offer and sign the credit agreement, you have a withdrawal period after the signature.

You have 14 calendar days from the signing of the contract to carry out this procedure with the lending institution. You can use the form provided with your credit agreement or this mail template:

Template letter - Withdrawal of a consumer credit (personal loan, revolving credit, etc.)

You must send your request via registered letter with acknowledgement of receipt.

During this 14-day period, you can renege on your commitment without having to justify your decision or have to pay any penalties.

Security deposit

The lender can ask you for a security deposit to limit its risks.

The amount of the guarantee corresponding to a fixed sum (€1,000 or €2,000) or a percentage of the value of the vehicle (10%from €10,000 = €1,000).

At the end of the rental contract, if you do not wish to acquire the car, the renter must return the security deposit to you, unless there is a dispute.

If you decide to purchase the vehicle, the security deposit will be deducted from the purchase price stipulated in the contract.

Please note

The security deposit does not generate interest.

The obligations you have to fulfill as a tenant are set out in the LOA contract.

Payment of rent

You have the obligation to pay the rents as set out in the contract from the date of receipt of the vehicle.

The amount and number of rents you have to pay are foreseen as soon as the contract is signed.

Some contracts provide for a 1er increased rent.

Unlike the security deposit, the surcharge applied to 1er rent is not refunded if you decide not to buy the car.

If you do not pay or irregularly pay the rents, the lender can terminate the contract or not.

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The lender wants to terminate the contract

You must then return the vehicle, pay the late rents and an indemnity calculated according to the terms of the contract. This compensation is generally based on the value of the vehicle and the remaining duration of the contract.

The lender does not want to terminate the contract

The situation varies depending on whether the lender agrees to defer the debt or not:

The lender agrees to defer the debt

If the lender wants to defer the debt, you can keep the vehicle, but the lender can ask you for compensation equal to 4% of the deferred rents.

The lender refuses to defer the debt

If the lender does not want to defer the debt, you can keep the vehicle, but the lender can ask you for compensation equal to 8% of the rent due and unpaid.

Maintenance of the vehicle

The costs of maintaining the car are at your expense, as a tenant.

You must keep the vehicle in good working order for the duration of the rental.

If it appears during use that the car is affected by a hidden defect, it is up to you to take the steps to have it repaired.

In the event of an accident, you must cover the costs of repairs if they are not covered by the insurance of one of the other persons involved in the disaster.

Vehicle Insurance

If you take a car in leasing, leasing or lease with option to purchase, you must insure it at least with the civil liability guarantee.

As the driver of the car, you must be able to justify, in the event of a roadside inspection, that the vehicle is well insured.

This warranty does not cover property damage to the vehicle and any injuries you may suffer.

It can therefore be useful, to avoid facing significant costs in the event of a loss, to subscribe to additional guarantees.

You can also take out specific leasing insurance. It makes it possible to take charge, in the event of destruction or theft of the vehicle, of the difference between the market value and the refurbished value of the vehicle.

Early termination is sometimes possible, but it usually involves the payment of indemnities provided for in the contract.

The amount of these allowances varies according to the remaining duration of the contract and the conditions set by the lessor.

Before requesting early termination, it is necessary to consult the terms of the contract to know the financial consequences of this decision.

Your lease ends after a lease period defined in the contract and which is generally between 2 and 5 years (24 and 60 months).

At the end of this period, your credit expires.

You can freely decide to buy the car or return it to the renter.

You can also ask to buy the vehicle before the end of the contract.

In any case, the lessor cannot oblige you to agree to purchase the vehicle in return for its agreement to your leasing request.

The situation varies depending on whether you decide to buy the vehicle or not, and depending on certain unforeseeable events (accident, death):

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You wish to buy the property

The possibility that you have to buy the car at the end of the contract is called call option.

If you exercise the purchase option, you will become the owner of the vehicle and you will have to change the vehicle registration certificate (now called a certificate of registration) to your name.

The purchase price stipulated in the contract will have to be paid.

This price corresponds to the difference between the value of the car, as indicated in the contract, and the total amount you paid in return for its use (deposit and rent).

You should consider claiming the return of your security deposit.

You don't want to buy the car

You must return the car to the rental company. He must return your security deposit.

However, if the car rental company believes that the car has defects due to poor maintenance, it may retain part or all of the warranty if this is stipulated in the contract.

You have the right to challenge the decision and ask to be present at the examination of the vehicle by an expert.

If you do not return the vehicle on time, the renter can file a complaint against you for breach of trust.

It is a offense for which you risk a sentence of up to 5 years in prison and €375,000 of fine.

Please note

When returning the vehicle, the renter may charge certain fees when they are provided for in the contract. This may include costs related to exceeding the authorized mileage, damage exceeding normal wear and tear of the vehicle or a delay in the return.

Before any billing, a condition of the vehicle is generally carried out.

If you object to the fees charged, you may request the relevant supporting documents and submit your observations.

The vehicle is unserviceable

If you have an accident with the vehicle and it is out of use, the lessor will terminate the contract.

Death of the tenant

If you die during the leasing, the lessor may decide to terminate the contract.

If you have taken out death insurance, it is the insurer who pays the rent still due to the lender until the end of the financing contract, within the limit of the guarantee.

If you do not have death insurance, your heirs must pay the balance of the financing to the lender. This balance therefore constitutes a debt to be recorded in the estate liability.

You can try to find an amicable solution first before going to court.

Attempting to reach an amicable agreement is a mandatory prerequisite for disputes whose value does not exceed €5,000.

Mediation or conciliation

In case of dispute with the lessor (dispute of the amount of rent, dispute of the amount of repairs at the end of the contract, difficulty of recovery of the guarantee...), you can request the intervention of a mediator or a conciliator of justice.

Please note

You can find legal information about unfair lease terms on the website of the commission on unfair terms.

Bringing the matter before the judge

If mediation or conciliation has failed, you can refer the matter to the judge.

You can apply to court for damages for the damage suffered. For example, if you feel you have overpaid rent.

The competent judge shall be protection litigation judge. The protection litigation judge that you must refer is the judge of the court competent for the seat of the business.

You must hire a lawyer if the value of the dispute is greater than €5,000.

The protection litigation judge that you must refer is the judge of the court competent for the seat of the business.

You can also report unfair trade practices to the DGCCRF: titleContent.

LLD

Long-term leasing (LLD) is a leasing agreement with no purchase option.

This contract gives you the right to use a car (or other property) for a long period (12 to 60 months), in return for paying monthly rents.

The landlord can also request a deposit or a first increased rent and a guarantee.

At the end of the period of use agreed in the contract, you must return the car to the renter, who remains the owner during the rental.

The LDD is offered by professional car sellers (dealer, garage, leasing business) or by banks or credit institutions.

The principle of the LDD is the same as that of a short-term rental: you pay rent for the use of the car over a given period. And you must use the vehicle according to the terms set out in the contract.

The lessor sets the amount of the rents so that the operation is profitable for him.

The rents he offers you are therefore higher than the monthly payments you would have paid if you had made a loan to buy the car.

Example :

For a car bought on the market at €10,000, the lessor can make you pay over the duration of the contract rents the total of which is €12,000 or €13,000.

Before signing a long-term rental contract, it is recommended to check the duration of the rental, the amount of rent, the mileage allowed, the services included and the conditions of return of the vehicle.

Particular attention should be paid to the fees that may be charged at the end of the contract.

To take a car in LLD, you must sign a contract with a business that offers this type of service.

The consumer credit underwriting rules do not apply to LDD contracts, unlike LOA contracts.

Advance Information

The lessor is not legally obliged to examine your financial capacity before making a contract proposal, but in practice it will do so to ensure that you have the means to pay the rents.

He will ask you about your income and expenses to find out if you have the ability to pay rent and maintain the vehicle throughout the contract.

Contract proposal

The lessor will indicate in the contract proposal the important elements on the conditions of the lease:

  • Contact details of the landlord, tenant and sureties, if they exist
  • Description of the proposed vehicle
  • Cash purchase price of the leased property
  • Duration of the rental operation (usually between 1 and 5 years)
  • Authorized mileage over the contract period
  • Amount and number of rents over the duration of the contract
  • Amount of penalties for exceeding the authorized mileage
  • Amount of penalties for late payment or non-payment of rent
  • Warning regarding the consequences of a default by the borrower.

Signature of the contract

To sign the contract, you must mark the ‘Read and approved’ on at least 2 copies of your lender's proposal, then date and the sign.

You must give a copy of the contract, dated and signed to the lessor.

Right of withdrawal

The withdrawal period is not imposed by law, but may be provided for in the contract.

Warranty

The lessor may ask you to make a deposit in cash or by check or to bring the bond of a person.

Payment of rent

By signing the contract, you agree to pay the rents until the end of the rental period.

Some contracts provide for a 1er increased rent.

If you do not pay or irregularly rent, the lessor applies what is stated in the contract.

The contract may provide that from a certain number of unpaid rents the lender has the right to terminate the rental or recover the property, and require the payment of the rents due and penalties.

Maintenance of the property

LLD contracts stipulate whether the vehicle maintenance costs are your responsibility or whether they are included in the rents.

In any case, you must keep the car in good working order for the duration of the rental.

If it appears during the rental that the car has a hidden defect, it is up to you to make the steps to have the vehicle repaired, but at the expense of the renter.

Compliance with the terms of use

The contract stipulates the conditions of use of the vehicle, and in particular the number of kilometers that you are entitled to travel during the rental period.

Failure to comply with mileage limits is punishable by the billing of additional rents according to a method of calculation set out in the contract.

Insurance of the property

You must insure the car as if you were the owner.

In the event of an accident, you will have to cover the repair costs, but you will also receive the insurance premium.

The lessor can offer you insurance, but you are free to insure the property with the insurer of your choice.

Early termination of an LLD is generally possible under the terms of the contract.

It may result in the payment of penalties or compensation to compensate for the early termination of the contract.

It is recommended to check the financial consequences before any request for termination.

The LLD ends at the end of the lease period defined in the contract.

At the end of this period, you no longer have to pay rent and you must return the property to the owner.

But the rental company can charge you if you have exceeded the mileage stipulated in the contract or if you have damaged the vehicle.

The method of calculating these fees and penalties must be defined in the contract.

If you wish to stop the rental before the end of the agreed period, the rules laid down in the contract must be applied.

In general, LLD contracts provide that in the event of early termination the tenant must pay all the rents due for the period from the date of termination until the end of the contract.

If you are in this situation, and you believe that you have a legitimate reason for early termination, you can try to negotiate with the lessor or take legal action.

You can try to find a solution, negotiate or go to court.

Mediation or conciliation

In case of dispute with the lessor (late penalties, additional mileage scale, termination indemnity, recovery of the guarantee...), you can request the intervention of a mediator or a conciliator of justice.

Please note

You can find legal sources regarding unfair lease terms on the website of the commission on unfair terms.

Go to court

If mediation or conciliation has failed, you can go to court.

You can ask the court to cancel or reduce the amounts that are claimed from you by the lessor.

You can also claim damages if you feel you have been harmed

For example, if the lessor has seized your security deposit to pay for early termination benefits that you dispute.

The competent judge shall be protection litigation judge.

Differences between the LOA and the LLD: what to remember

LOA

  • You use a vehicle in return for paying monthly rents
  • You can buy the vehicle at the end of the contract at a fixed price upon signing
  • The contract is treated as a consumer credit
  • You have a withdrawal period of 14 days.

LLD

  • You use a vehicle in return for paying monthly rents
  • You must return the vehicle at the end of the contract
  • You may not become the owner of the vehicle, except as specifically provided in the contract

In practice:

  • The LOA is suitable if you plan to buy the vehicle at term
  • The LLD is suitable if you only want to have a vehicle for a fixed period of time, then return it.

Who can help me?

Find who can answer your questions in your region

  • DGCCRF 0809 540 550 - ResponseConso

    Are you having a problem following a purchase? Do you have a question about a point of law before buying or ordering?

    You can get an answer from an agent of the DGCCRF: titleContent by calling the 0809,540,550.

    Opening hours of the service:

    Number not overtaxed

    • Monday and Tuesday: from 8.30am to 12.30pm and from 1.15pm to 5.15pm
    • Wednesday: 1:15 pm to 5:15 pm
    • Thursday: from 8:30 am to 12:30 pm
    • Friday: from 8:30 am to 4 pm

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