In Germany almost every household owns a car. At least when you look at the statistics. According to figures from the Federal Motor Transport Authority, there are a total of more than 45 million cars 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. If you want to get ahead in your job, you move house or drive a car. A fact that raises completely different questions. How do you finance a car? Especially when families need two cars, the whole thing becomes a burden.
Cash payment is rarely an option. There is only one option left – buying on credit. At this point, you almost always think of the car loan first. The purchase price is repaid in fixed installments. In recent years, however, the range of options has also become “more colourful” here. Depending on your financial and family situation, you can choose between different financing options. One is leasing. In addition to the well-known car financing, it does not play a major role – at least for families. Why actually? What makes leasing a car so special? This article takes a closer look at the previous questions.
Loan financing: The classic way to get a car
In the eyes of many households, the classic form of vehicle financing is still the car loan. The latter can now be claimed in various ways. One option is a bank loan. At the same time, the car loan from the dealer would be an alternative.
The latter often comes from the manufacturer banks. Is this option always better? No, manufacturer-independent loans pay off against the background:
- Low interest rates
- Higher discount opportunities than cash payers
Balloon or three-way financing has gradually become more widespread in recent years. The latter has certain similarities with leasing.
Leasing – advantages and disadvantages at a glance
Leasing comes as a term from the English-speaking world and stands for lease or rent. The core of the whole is an economic good, which its owner allows a person or a company to use. In return, the lessee pays a leasing fee as a usage fee.
Interest costs are also included in the fees, since the leasing companies also finance their fleet externally. In general, leasing is similar to the rental relationships known from the German Civil Code. But: The lessors often free 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 never acquires ownership rights. In addition, there are currently two main basic types of leasing.
- Mileage leasing: Here both parties agree on a certain mileage in kilometers at the end of the term. If this is exceeded, the lessee has to dig into his own pocket for additional kilometers driven. In the case of short kilometers, these will be remunerated within a certain framework.
- Residual value leasing: At this point, a calculated residual value is specified. In addition to the mileage, this is influenced by various factors. If the actual residual value differs 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 set to certain standards. As the owner of a car, you decide to what extent:
In the case of leasing, the right to choose does not usually apply. As a lessee, you have to take out fully comprehensive insurance.
And the inspections or repairs in the brand workshops are often part of the contracts. Every household simply has to be aware of this aspect.
What should a good car insurance include?
Fully comprehensive insurance is mandatory as car insurance in leasing. If you are not put off by this, you should not just blindly buy if the leasing company also offers a service and insurance package. It usually pays to compare for yourself. According to kfz-versicherungen.com, if you want to change your car insurance, you have to consider a few things:
- Ordinary termination is normally only possible at the end of the contract period, which is one year by default.
- Since many contracts run with the calendar year, November 30th is the last date for cancellation due to the one-month notice period.
- Extraordinary terminations are possible in the event of a vehicle change, a premium increase or in the event of damage.
In order to survive, a certain tariff should also include corresponding services. As is well known, fully comprehensive insurance covers accidents or vandalism that you caused yourself. It is essential to check to what extent the no-claims discounts pay off for accident-free driving. Good insurance can also score points in other areas. Contribution discount is among other things for:
- Low annual mileage
- Few drivers
- A deductible expected. In addition, there are discounts due to being tied to a workshop.
The following aspects are particularly important when it comes to motor vehicle liability insurance:
- Coverage of 50 to 100 million euros
- Integrate the Mallorca policy in the contract
- Discount savior so that you don’t immediately lose a large part of the no-claims bonus after an accident
Important: The deductible for a tariff should not be taken too far. At this point, the possibilities of the household budget are exhausted at some point. How high the SB is at the end of the day 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 commercial and private contexts. However, it is only suitable for households to a limited extent. One reason is the general conditions. There is a cost risk in leasing that is difficult to calculate. The whole thing is still much more attractive for commercial customers. Background: In this way, companies protect their own liquidity, since leasing does not tie up any capital as an asset that has to be written off over the years. Ultimately, as a household, you should check in great detail which option really pays off in the end.