Buying a Car at the End of a Lease: How It Works and What It Costs

The monthly payment is PLN 1,250 net, the agreement ends in three months, and the schedule shows a 20% purchase option. Then comes the obvious question: how much will you actually have to pay for the car?

The figure is in the contract, but it does not tell the whole story. You also need to account for VAT, how the vehicle will be used, any fees charged by the leasing company and the tax consequences of selling it later. It also matters whether the car is purchased by the business or privately.

The basic rule is straightforward: the lease-end price is largely determined when you sign the agreement. A lower final payment usually means higher monthly instalments. A higher one reduces the monthly burden but leaves a much larger bill at the end.

What does the purchase option actually mean?

Under a Polish operating lease, the leasing company remains the legal owner of the vehicle. The business uses the car and pays monthly instalments, but ownership does not transfer automatically once the final instalment has been paid.

The purchase is a separate transaction. The leasing company sells the car to the user for the amount specified in the agreement, normally issuing a separate invoice.

Assume the car’s original value was PLN 100,000 net:

The percentage is usually calculated on the initial price stated in the agreement, not on the vehicle’s current market value. That distinction matters. After four years, a Toyota Corolla may be worth PLN 70,000 even though the contractual purchase price is only PLN 10,000 net. The reverse can also happen: a high final payment may come close to the asking price of comparable cars, making ownership far less attractive.

The exact calculation method is always set out in the agreement. Do not assume that every lease ends with a 1% purchase option.

A low or high final payment?

A low purchase option, say 1–5%, usually suits a driver who intends to keep the car from the outset. Most of the vehicle’s value is repaid through the monthly instalments, leaving a relatively modest amount at the end.

There is a trade-off. The monthly payment will be higher.

With a final payment of 20–40%, the instalments fall because a larger part of the vehicle’s value is deferred until the end of the contract. This can ease pressure on the company’s day-to-day cash flow. It may also work well for a business owner who plans to sell the vehicle, settle the agreement and move into a newer model.

Problems arise when a high final payment comes as a surprise four years later. A net amount of PLN 30,000 or PLN 40,000 does not disappear simply because every instalment was paid on time. It can be covered from the company’s own funds or, in some cases, refinanced under a new agreement. Refinancing needs to be assessed on total cost, though, not just the new monthly payment.

The Carmore calculator lets you compare instalments using different contract parameters. Run at least two scenarios: one with a low final payment and another with lower instalments but a larger amount due at the end.

VAT depends on who buys the car

If the business exercises the purchase option, the leasing company issues an invoice to the business owner or company. As standard, 23% Polish VAT is added to the net price.

A VAT-registered business can generally deduct:

• 50% of the VAT if the passenger car is used for both business and private purposes;

• 100% if the vehicle is used exclusively for business and all relevant requirements are met, including mileage records and submission of the VAT-26 form.

On a net purchase price of PLN 20,000, VAT is PLN 4,600. A 50% deduction allows the business to recover PLN 2,300. Depending on the accounting treatment and the taxpayer’s status, the non-deductible portion may affect the vehicle’s tax value.

A business exempt from VAT cannot recover the tax shown on the invoice. Its economic cost is therefore the full gross amount.

A private purchase works differently. The invoice is issued to the individual, so VAT remains part of the price and cannot be deducted. This must be agreed with the leasing company before the invoice is issued. Trying to change the buyer’s details afterwards may result in the leasing company refusing to correct the document.

A private purchase no longer allows a quick tax-free sale

For years, Polish business owners commonly followed a simple route: they bought the leased car privately, waited six months and then sold it without personal income tax. Rules introduced in 2022 significantly restricted this option.

If a car was used by a business under a lease and subsequently purchased privately, selling it before six years have elapsed may be treated as business income. The six-year period is calculated under the applicable tax rules, rather than simply running from the exact date on which the purchase invoice was paid.

This is particularly relevant if someone plans to buy the car for 1% and sell it at market value a month later. The gap between the contractual price and the sale proceeds can be substantial. So can the tax bill.

Polish rules governing the sale, donation and withdrawal of business vehicles have changed several times in recent years. If the car is worth tens or hundreds of thousands of złoty, discuss the specific transaction with an accountant or tax adviser before committing to it.

When does keeping the car make sense?

Start by comparing the amount on the purchase invoice with the genuine market value of similar vehicles. Not the highest advertised price. Look at cars with a comparable year, mileage, engine, equipment level and service or accident history.

A 2022 Skoda Octavia with 180,000 km of fleet use is not worth the same as one showing 65,000 km. That remains true even if both have a 2.0 TDI engine and look nearly identical in the photographs.

Keeping the car will often make sense when:

• the final price is clearly below its market value;

• you know the vehicle’s history and can confirm that it has been serviced properly;

• it still suits the way the business operates;

• it is not about to need expensive repairs, new tyres, brakes or transmission servicing;

• you would rather avoid the cost and time involved in finding a replacement.

The gap between the purchase price and market value is not enough on its own. If the car will need PLN 8,000 of servicing, tyres and suspension work within six months, the apparent bargain quickly loses its appeal.

The opposite happens too. A business owner keeps a several-year-old BMW 5 Series because it feels wasteful to give it up, even though the car no longer fits the budget and covers only 8,000 km a year. The decision is emotional. Insurance, maintenance and depreciation are not.

Would returning the car be the better option?

Under a conventional operating lease, having the right to buy the car does not always mean you must use it. The available options depend on the agreement and the leasing company’s procedures. Declining the purchase may involve returning the vehicle, selling it to a nominated buyer or closing the finance arrangement in another approved way.

Long-term rental agreements can work differently. Returning the vehicle is usually the default outcome, while a purchase option may be unavailable or priced at the car’s current market value. A rental contract should not be treated as a lease with a guaranteed low final price.

Before the agreement ends, check four things: the deadline for notifying the leasing company of your decision, the final amount due, the required documents and any administration fees. Missing the deadline can complicate the purchase or automatically trigger the return procedure.

Calculate the entire agreement, not just the last invoice

The final price is only one part of the finance cost. A proper comparison must include the initial payment, total instalments, purchase option, commissions, insurance and taxes. Two offers may both show a monthly payment of PLN 1,200 net yet have completely different overall costs if one ends with a 1% payment and the other with 30%.

Run your figures through the Carmore lease payment calculator to see how the contract term, initial contribution and final amount affect the monthly cost. If a bank has declined your application or offered terms that do not work for your business, contact Carmore. We will check other financing routes for a used car, without pretending that every application will be approved.

Images (manufacturer press materials)

• Toyota Corolla Touring Sports, side view or driving shotan example of a widely used company car that is often retained after the finance agreement ends. Source: the official Toyota press centre.

• Skoda Octavia Combi, interior and luggage-space photographto illustrate the practical assessment of whether a several-year-old vehicle still meets the company’s needs. Source: Škoda Storyboard or the manufacturer’s official media library.

• BMW 5 Series, static photograph of a previous-generation modelfor the section discussing emotional purchase decisions and the running costs of a premium car. Source: BMW Group PressClub.

• Volkswagen Transporter or Caddy in commercial useshowing that lease-end purchases also apply to vans. Source: Volkswagen Newsroom.

Images should come from manufacturers’ official press centres and be licensed for editorial use. Before publication, check the applicable licence terms and any required photographer or brand credit.