PR/Business Insider
- Car leasing is a temporary rental model for vehicles. The biggest advantage of leasing is that you hardly have to put up any equity to buy a car and instead pay manageable and easily planned monthly installments for it.
- When leasing a car, you should pay particular attention to the so-called leasing and total cost factors in addition to the term and the monthly rate. These are values that help you to evaluate a leasing offer. The lower this factor, the better the offer.
- In our comparison, we show you where you can find the cheapest and most attractive leasing offers of the month.
Before car sharing and the like, car leasing was the alternative to buying a car. This is a time-limited rental model for cars. As part of a leasing contract, drivers receive a new vehicle for which they pay monthly installments over a fixed term. At the end of this term, the car will then be returned. It can then be exchanged for a new model or, in some cases, purchased. For a long time, this service was mainly used by tradespeople (because it has various accounting and tax advantages), but now it is also attracting increasing interest from private customers. No wonder, after all, leasing gives people who don’t want or can’t buy their own car the opportunity to keep a vehicle – with manageable running costs.
How does car leasing work?
When it comes to car leasing, a basic distinction is made between mileage leasing and residual value leasing. With mileage leasing, the leasing contract agrees not only on the term but also on an upper limit for the mileage of the car. If it falls below this, customers will receive a refund after the contract has expired. If it is exceeded, additional payments are due. In contrast, with residual value leasing, the value of the vehicle is decisive. At the beginning of the contract, it is recorded how much the car should still be worth at the end of the term. This is then determined by an appraiser after the car has been returned. Any differences in the contractually agreed and actual residual value are compensated either by the provider or the customer.
You should pay attention to this when leasing a car
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In order to find the perfect leasing offer, there are various points that you should consider. In addition to the desired vehicle, this includes, for example, the term of the leasing contract (which in turn influences the monthly leasing rate), the agreed mileage or residual value of the car and the so-called leasing factor. This is a value that results from the monthly leasing rate and the gross list price of the car and is used as a comparison value for various leasing offers. The lower this value, the better the offer. Finally, there are also often set-up and delivery costs when leasing a car, which should be taken into account before signing a contract. These can be evaluated using the total cost factor, which, in contrast to the leasing factor, also includes the ancillary costs.
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If you want to lease a car, it is worth comparing different offers in advance. Many providers have time-limited promotions with attractive deals and low leasing rates, some of which are less than 100.00 euros per month. A comparison with current offers for cheap car leasing can be found here. Just scroll through the following list of comparable offers!
Comparison: Cheap car leasing offers in April 2023
Other useful information about car leasing
What else should you know about car leasing? Here are a few more important tips for you to help you make the right decision when leasing a car.
The most important tips for car leasing
As a rule, the vehicle must be returned after the leasing period has expired. Therefore, you should handle it carefully, as you will be asked to pay for any damage. Repairs can be carried out, but usually have to be carried out by authorized workshops. This can quickly become expensive because you are tied to specified partners and cannot obtain and compare your own offers. In addition, as the lessee, you are responsible for the car and its maintenance and insurance. Here, too, in most cases you cannot go to just any service provider, but have to follow the leasing partner’s regulations. That’s why many dealers offer service packages that include services such as maintenance and care for a fixed monthly price. This can be useful if you don’t want to take any risks and want to keep your costs relatively stable from start to finish.
Car leasing: these are the pros and cons
The biggest advantage of car leasing is that you can get a new car without high acquisition costs. Instead, you pay moderate monthly rates for a predetermined term (usually between twelve months and four years). The costs can be planned and are manageable, as they are contractually recorded. Another advantage of leasing is that you can simply return the car after the contract has expired. So you don’t have to resell it yourself if you want to switch to a newer model, for example. Alternatively, many dealers also offer you to take over the leased vehicles after the leasing period if you wish.
However, leasing also has a few disadvantages that you should be aware of. Although all costs can be relatively planned, additional payments can become due – for example, if you damage the car or exceed the specified mileage. With residual value leasing, you also take on a residual value risk by making yourself dependent on the appraiser’s assessment. The biggest disadvantage, however, is that leasing contracts are so inflexible. This means that there is usually no chance of terminating the contract before it expires and you must continue to pay your monthly installments until the end of the one to four year term.
Conclusion: How useful is car leasing?
Car leasing can make a lot of sense if you want a brand new vehicle without having to take out a loan or put up a lot of equity. Since you don’t buy the car yourself, leasing allows you to switch back to a brand new car after the contract expires without worrying about reselling the current vehicle. The costs are relatively stable, which gives you great planning security. Since leasing contracts cannot be terminated, you should only commit yourself at the same time if you are sure that you will need the car for the entire term. Also make sure that as a lessee you are bound by certain instructions from your contractual partner. We therefore recommend that you book service packages for maintenance and insurance. Although these additional options are usually a bit overpriced, they save you valuable nerves and stress.