If your answer to the question about car financing - do you want to own the car at the end of the period? - is no, then the two plans designed for you are generally called something like operating lease and finance lease.

If you are not sure at the start of the term what you want to do at the end of it, then contract

purchase is worth considering, because that is the plan which, with a final payment agreed in advance, allows you to delay any decision about whether or not to keep the car until the end of the term of agreement.

Operating lease involves a fixed-period hire, when you estimate your likely mileage and also at what point you will need a replacement car. With that information, plus the usual calculations about the difference between the car's original price and its likely residual value, numbers are crunched to come up with a monthly payment figure, which in this case is based on only part of the car's value.

One advantage of this plan is that you have no hassle about disposing of the car after the end of the term. The leasing company carries any risk involved in the actual rather than anticipated resale value.

Finance lease is similar, although more complicated. At the end of the contract most of the resale price is returned to you. On the other hand, if you have decided to go for a final payment calculated in advance to be less than the likely residual value, and the car does not sell for as much as was expected, then you will be responsible for paying any difference.

Contract purchase, which appears under various names in different portfolios of financial products, is another plan which involves a final payment based on your expected mileage during the period of the agreement. But when the contract comes to an end, various options are open to you.

In a typical contract purchase plan, you can decide at the end of the period to hold on to the car for another year, say, and make the final payment in 12 monthly instalments. Or you can opt out of making the final payment and return the car, paying excess mileage charge incurred.

Or, finally, you can make the final payment, keep the car and either continue to use it, or perhaps sell it on your own account and use the money to enter into another agreement.

There are several other plans of a similar kind. Jaguar's flexible lease, for example, includes the possibility of settling up at any time after the first year. In fact, the companies are competing for business so strongly that there will almost certainly be a plan to suit any reasonable requirements you may have.

Like all businesses, the manufacturers themselves, and their finance divisions, are subject to mergers and takeovers. Rolls-Royce is the most heavily publicised recent example, focus of a story, bewildering at times, which must surely some day be the sub ject of a keenly researched book.

The recent talks between Mercedes and Chrysler came as a complete surprise even to some industry observers. And BMW, now firmly in control of Rover, has made substantial administrative as well as factory-floor changes.

For contract hire and leasing customers, the most significant of these is that the previously free-standing Rover Finance, a joint venture between Rover Group and Lombard North Central, stopped writing new business as of May 5.

Rover Financial Services has been created to take over the leasing and contract hire not just of Rover cars themselves, but also of the subsidiary makes Land Rover, MG and Mini, as a wholly owned subsidiary of BMW AG, and effectively as a department of B MW Financial Services, which is itself only a year old. The new company promises to provide simpler administration, greater flexibility of the financial products on offer, and several other enhancements including a better payment protection insurance scheme.

In the wider world, the British Vehicle Rental and Leasing Association, which represents around 1100 member companies running something like 1.75 million vehicles, claims that, especially in some of the smaller rental and leasing operations, the pips are certainly squeaking.

Increased costs within the industry itself, the recent drop in average residual values and the car manufacturers' tougher attitude to returned rental vehicles have all caused problems.

Another is the recently applied #25 new-car registration fee, which is simply a tax given a different name.

The daily rental companies may add a small surcharge to their invoices to cover that extra cost. Although the surcharge is likely to be a matter of pennies, it will almost certainly also appear, in one form or another, in the financial arrangements for longer-term leasing and contract hire.

Most contract hire and leasing arrangements mean that you pore over road tests and catalogues, listen to friends' opinions, figure out how much you can afford in monthly payments, make your choice of a particular make and model, and sign up for it.

But what if, during the two or three-year period, you get a little bored with the car you decided on, or find you have some extra disposable income and would like to move to something grander, or conversely suffer from a drop in income, have extra family expenses or whatever, and would like to move to something smaller? What if, for sound business reasons, you suddenly need an estate car rather than a saloon, or simply have a rush of blood

to the head and fancy a sportier car?

Mercedes was the first manufacturer to offer its UK customers the chance to change in mid-contract. Its Variations scheme takes in most of the model ranges it sells here, dividing them into six different price bands, and offers the opportunity to move between them. The cars include saloons, coupes, convertibles and limousines, from the entry-level C-class to the top-rated S-class, most of them with a traditional appeal to business users.

When you select a car in one of the six price bands, a monthly rental direct debit figure is calculated, to include maintenance and repair costs, road fund licence, breakdown cover and European insurance. If you decide to swap your car for another Mercedes in the same price band, you simply pay a #60 exchange fee. If you want to move up or down into a different price band, you pay the same exchange fee, and your direct debit is altered to suit the new category.

So it is possible to start with, say, the entry level car of the Mercedes range, a 1.8-litre C180 saloon, and at some point make a change to a more dramatic looking CLK coupe. Of course, Variations is just one of the financial products Mercedes provides.

For people who prefer to stick to the car they started with, the company also offers a full range of other purchase and leasing arrangements of more conventional kinds.