Is leasing worth it for private individuals?

In Germany, almost every household owns a car. At least if one reaches for the statistics. In total – according to the figures of the Federal Motor Transport Authority – more than 45 million passenger cars are on the road in Germany. And their number is increasing. Mobility on four wheels has clearly gained in importance in recent decades. One reason is certainly the increased expectation of professional flexibility. Who wants to get ahead in the job, moves or drives with the car. A fact that raises quite different questions. How to finance a passenger car. Especially when families need two cars, the whole thing becomes a burden.

Cash payment is rarely an option. Only one variant remains – the purchase on credit. At this point one thinks first almost always of the car loan. The purchase price is repaid here in fixed installments. For some years now, however, the range of options has become "more colorful" here as well. Depending on the financial and family situation, one may choose different financing options. One is leasing. Besides the well-known car financing does not play a big role – at least for families. Why actually? What makes leasing a car so special? In this article we will go into more detail about the previous questions.

Credit financing: The classic way to the car

Certainly in the eyes of many households, the classic form of car financing is still the car loan. Today, the latter can be taken up in various ways. One option is the bank loan. Parallel would be the car loan at the dealer an alternative.
The latter often comes from the manufacturer banks. Is this option always better? No, manufacturer-independent loans pay off against the background:

from. In recent years, balloon or three-way financing has gradually become widespread. The latter has certain similarities with leasing.

Leasing – advantages and disadvantages at a glance

Leasing as a term originates from the English-speaking world and stands for lease or rental. The core of the whole is an asset, which its owner gives to a person or a company for use. In return, the lessee pays a leasing fee as a usage fee.

The fees also include interest costs, since the leasing companies also finance their fleets with outside capital. In general, leasing is similar to tenancies known from the German Civil Code (BGB). But: the lessors often exempt themselves from certain obligations – in the context of warranty and maintenance. What makes leasing attractive at first glance are the comparatively low costs.

But: Unlike financing through a loan, the lessee does not receive ownership rights at any time. In addition, there are currently two main basic types of leasing.

  • Mileage leasing: Here both parties agree on a certain mileage of kilometers at the end of the term. If this is exceeded, the lessee must pay for additional kilometers driven in his own pocket. In the case of reduced mileage, this is compensated to a certain extent.
  • Residual value leasing: At this point, a calculated residual value is determined. This is influenced – in addition to the mileage – by various factors. If the actual residual value deviates at the time of return, it can be expensive for the lessee.

In addition, when a vehicle is returned, the lessor will usually pay very close attention to the condition and wear and tear of the vehicle.

Leasing and car insurance

Lessors have an interest in protecting the leased asset. Therefore, at this point – in terms of insurance and repairs – you are usually held to certain standards. As the owner of a car, you decide to what extent:

are eligible. With leasing, the right of choice is usually not applicable. Here you have to take out a full insurance as a lessee.
And also the inspections or repairs in the mark workshops belong often to the contracts to it. Every household simply has to be aware of this aspect.

What a good car insurance policy should include?

Comprehensive insurance is mandatory as car insurance in leasing. If you are not put off by this, you should not just go for it blindly if the leasing company also offers a service and insurance package. It usually pays to compare yourself. If you want to change your car insurance in the process, you must, according to a few things to keep in mind:

  • Ordinary termination is normally only possible at the end of the contract period, which runs for one year by default.
  • Since many contracts run with the calendar year, the 30. November is the last date to cancel due to the one-month notice period.
  • Extraordinary cancellations are possible in the event of a change of vehicle, an increase in premiums or in the event of a claim.

In order to be successful, a particular tariff should also include appropriate services. With comprehensive insurance, as is known, self-inflicted accidents or vandalism are also covered. It is essential to check to what extent the no-claims bonus for accident-free driving pays off. In addition, a good insurance can score in other places. Premium discount is among others for:

to be expected. In addition, discounts beckon through the workshop commitment.

In the case of motor vehicle liability, the following aspects in particular are very important:

  • Coverage of 50 to 100 million euros integrated in the contract
  • Discount saver, in order not to lose a large part of the no-claims bonus immediately after an accident

Important: The deductible for a tariff should not go too far. At this point, the possibilities of the budgetary funds are eventually exhausted. How high the SB becomes under the bottom line, depends very much on individual factors.

Conclusion: Leasing rarely pays off for private households

Leasing contracts are one of the means of financing a car today. Leasing is offered in both the commercial and private context. However, it is only conditionally suitable for households. One reason is the general conditions. There is a cost risk in leasing that is quite difficult to calculate. It is still much more attractive for commercial customers. Background: Companies conserve their own liquidity in this way, since leasing does not tie up capital as an asset that has to be depreciated over years. Ultimately, as a household, you should check in great detail which option will really pay off in the end.

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