your rights : leasing – important information on concluding and terminating the contract
Leasing is the opposite of financing. You do not buy a car. But you do not really rent it. Read all about leasing here.
instead of buying a car, you can lease it. This form of financing is becoming increasingly popular with private individuals. You receive the vehicle for a fixed term and pay a fixed monthly amount for its use.
The owner remains the lessor. Sounds like renting? In fact, the word leasing comes from the english language and means "renting". But compared to a rental relationship, leasing has subtle but important differences. During the leasing period, for example, the lessee is fully responsible for the vehicle. As the lessee, you are responsible for maintenance, repairs and insurance – not the official owner or lessor.
In the article you will find important information on the following topics:
Where is leasing regulated by law?
The leasing contract regulates the general conditions and defines the financing model. However, there is no uniform legal basis for leasing. Relevant laws can be found in the German Civil Code (BGB) under the tenancy law and in other legal areas such as the consumer credit law and the commercial law. In the event of disagreements about the residual value, extraordinary termination or a total loss, you should take the precaution of consulting a lawyer who is familiar with leasing law.
There are different types of leasing contracts, namely a leasing contract with residual value accounting, a contract with a right to offer and the mileage accounting model. Be sure to read the fine print of your contract. As a rule, the leasing contract cannot be terminated without further ado.
A lease with residual value settlement consists of a special payment at the start of the contract, the lease payments and the estimated residual value of the vehicle at the end of the contract term. If the estimated residual value is higher, the lease payments are lower. The estimated residual value is offset against the actual value of the vehicle at the end of the contract period. If the lease price is too high, you may have to pay a large surcharge. in this case the lessee must pay for the difference. Therefore, do not be lured by low leasing rates and insist on an assessment of the residual value that is as realistic as possible.
In contracts with a right of tender, the estimated residual value of the vehicle is also determined. If the actual value of the car at the end of the lease term is less than the estimated residual value, the lessor may require the lessee to buy the car. However, regardless of the residual value, the lessee has no right to purchase the vehicle. If the lessor does not explicitly require it, the lessee cannot buy the car either.
In the mileage-based model, a total number of kilometers is specified for the entire term of the lease agreement. If this number of kilometers is exceeded, additional kilometer costs are added. The cost is usually between ten and 15 cents per kilometer. There is no residual value calculation at the end of the contract term, so there is no risk of a high subsequent payment at the end of the term in this respect. In return, the leasing rates are usually set higher.
The leasing contract can only be terminated for cause before the end of the contract period. For example, if the lessee does not comply with the terms and conditions of the contract and does not maintain the vehicle properly, transfers the vehicle to other persons without permission or intentionally makes false statements when concluding the contract.
What is a lease takeover?
So what do you do if your personal situation changes and you no longer need the leased car?? Since you cannot terminate the contract, the only option is to take over the lease. In the case of a lease transfer, an existing contract is handed over to a new contract holder. The new lessee takes over the remaining installments and the costs of amending the contract.
What documents are required for leasing?
If you want to lease a car privately, your creditworthiness will be checked first. For this check you will need your identity card or a copy and the last three salary slips. If you lease the car as a company car, a so-called self-disclosure, the last annual financial statement of the company and an excerpt from the commercial register or a business registration will be requested. If a leased vehicle is used for commercial purposes, the costs can be claimed as business expenses. If you lease the vehicle privately, this tax advantage does not apply.
Leasing – who is the owner?
In the case of leasing, the lessor remains the owner of the car, but transfers the rights of use to the lessee. The difference between leasing and renting is that a landlord would still be responsible for the maintenance of the rented property. In the case of a lease, the costs of repairs are borne by the lessor. In the case of leasing, the lessee is responsible for the vehicle. He must ensure timely maintenance, carry out repairs at his own expense, pay taxes and take out insurance.
Who is in the vehicle registration document when leasing?
The vehicle registration document, officially called registration certificate part I, contains information about the vehicle owner and the vehicle data. Changes to the vehicle are recorded in the vehicle registration document. The lessee is entered in the vehicle registration document as the owner of the vehicle. You should always keep the vehicle registration document with you in the car. If the vehicle is leased as a company car, the name of the company is entered in the vehicle registration document.
Who is on the vehicle title?
The vehicle registration certificate, officially called registration certificate part II, contains information about the official owner of the vehicle. In case of leasing, this is the leasing company. The lessor, as the owner of the vehicle, retains the vehicle registration document. Only in the event of a later purchase of the vehicle, the original vehicle registration document is left with you.
Leasing – who pays the tax?
As the vehicle owner, the lessee must pay the taxes for the vehicle. Fully comprehensive insurance is also stipulated in most leasing contracts. In all-inclusive leasing contracts, costs such as taxes, insurance and repairs may be included. With these all-inclusive packages, you only have to pay the leasing rate. With such a financing model, however, this also turns out to be correspondingly higher. Calculate exactly which model is worthwhile for your no-claims bonus class.
Who can drive the leased car?
In case of private leasing, family members are allowed to use the car as well. However, please observe the individual agreements in your leasing contract and the clauses in your insurance policy. In the case of commercial use, the car can be driven by the company’s employees, provided that the insurance covers this shared use.
Who pays for repairs of the leased vehicle?
If the lease payment does not include a flat rate for insurance and repairs, the lessee is responsible for repairs themselves. Maintenance work must be carried out at the intervals specified by the manufacturer. For regular maintenance, use only the manufacturer’s authorized service centers to avoid jeopardizing your warranty claims.
What is a special payment in leasing?
A special leasing payment is also called a leasing down payment. This becomes due at the beginning of the contract period. the higher the special payment, the lower the monthly lease payments. Unlike purchase financing, however, a down payment is not required. This makes private leasing particularly interesting for young customers without high reserves. a special payment in the amount of approx. Ten percent of the purchase value.
What is the residual value of a leased car??
The residual value is the actual value of the leased car at the end of the lease term. This value depends on the condition, age and mileage of the car. The estimated residual value is calculated at the beginning of the lease and recorded in the leasing contract. Defects and damage to the leased object lead to a reduction in value when the leased vehicle is returned. If you have chosen a contract model with residual value accounting and the actual residual value is low, high additional payments can be demanded.
What are signs of use on the leased object??
Traces of use are visible marks on the leased object caused by the normal use of the vehicle. This includes superficial scratches, small stone chips or minor traces of use in the interior. These occur even with careful use and do not have a negative effect on the residual value of the vehicle with a reputable lessor. The situation is different in the case of real damage and defects. These include major dents, scratches, damage to the paintwork, and stains or holes in the seat upholstery.
Leasing – what happens in the event of a total loss?
If the worst case scenario occurs and a total loss is incurred, it is not possible to cancel the leasing contract. The insurance pays out the replacement value of the car. This is usually significantly lower than the total value of the remaining lease installments and the estimated residual value. The insurance does not cover this difference. If no additional insurance has been taken out, the lessee is left to bear the costs. A total loss does not lead to an automatic termination of the leasing relationship.
The so-called GAP coverage can protect against this risk. If the estimated residual value of the vehicle is relatively high, this additional insurance makes sense. GAP insurance can be taken out as an optional extra. This insurance covers the difference between the car or liability insurance payout and the remaining total of lease payments and residual value.