Loan, Hire Purchase and Lease are the three popular finance options.

To most people seeking finance, what appears of supreme importance is - how much more do I end up paying over and above the finance amount availed? Nevertheless this alone cannot help judge a good scheme from an expensive one. Although all the three options may appear similar and signing on the dotted lines of the agreement seem more like procedural ritual before owning a car, knowing certain aspects of the transaction is very important.

A loan is a credit facility extended by a Bank to the Borrower, which is repaid in installments over a period of time i.e. 'the loan tenure'.
Loan for a car can be obtained from Indian & foreign (Multinational) Banks.

This is an agreement under which the car is let on hire and under which the hirer has an option to purchase the car in accordance with the terms of the agreement. Hire Purchase agreement is mostly offered by Non Banking Finance Companies. Broadly this option works similar to the loan option. NBFCs usually charge an amount as low as One Rupee, called Option money, on payment of which the car passes on to the hirer.
The NBFC's have taken to this option, as they are not encouraged to give loans, which is a Banks privilege. Bank loans form a substantial chunk of the NBFC's own source of funds and they are bound by the logic - 'You cannot loan a loan!!'

Lease is a contract between the owner of an asset (the Lessor) and its user (the Lessee) for the hire of that asset. The ownership rests with the lessor while the right to use the asset(car) is given to the lessee for an agreed period of time in return for periodic rental payments by the lessee to the lessor.
Lease agreements are offered by NBFC's and are mostly availed by Corporates looking at it mainly from tax saving angle. With the Indian Government plugging the tax loopholes, the lease scheme is not as popular these days as they were a few years back.