Private leasing : this is how leasing works for private people
Is leasing really an all-round carefree package that is also worthwhile privately?? Where can hidden costs lie? Here you get tips and info on private leasing.
companies and freelancers often resort to car leasing instead of financing a car. The reason for this is that the leasing rates are tax-deductible. However, this is not the case for private individuals, so the question arises as to whether vehicle leasing is worthwhile for private individuals at all. And if so, what exactly do you have to pay attention to before signing a leasing contract??
If you lease a vehicle privately, you are not the owner, but only have the right to use the car. The term "leasing" comes from the english language means "leasing, so why you are the renter of the vehicle, while if you finance it with a loan, you become the owner of the car once it is repaid. If you want to lease a vehicle, you can choose between the following contract models:
In this article you will find information on the following topics:
What is a residual value contract in leasing?
This determines how much the vehicle is still worth at the end of the contract. The leasing rate is then calculated on the basis of the current vehicle value plus fees and interest and less the residual value determined. The higher the residual value and the longer the lease term, the lower the lease rate will be.
TipHowever, if the residual value is set too high, you will also have to make a high additional payment in the end. Therefore, it is important that the determined residual value is congruent with the actual vehicle value and is agreed on the basis of the dealer purchase price and not the dealer sales price. In fact, the dealer selling price can be up to 15 percent higher than the purchase price.
In addition to the residual value, the contract term, the leasing rate and the conditions, further agreements can be made in the leasing contract. This is where the so-called right of tender comes into play: the lessee is obligated to purchase the car under certain conditions when the lease expires and thus assumes the residual value risk.
Another type of contract is the "car leasing with surplus income participation": the lessee is entitled to sell the car to someone else at the end of the leasing contract. If the selling price is then lower than the residual value, the lessee is obligated to pay the difference. If the selling price is higher than the residual value, which is very unlikely, the lessee would receive the additional profit.
What does mileage leasing mean?
In the case of mileage leasing, the contract is calculated on the basis of the number of kilometers covered per year. The kilometers per year are usually between 10.000 and 20.000 kilometers. There are special contracts for frequent drivers, as well as for less frequent drivers (z. B. weekend vehicles). Compared to residual value leasing you don’t have to worry about the car losing value.
However, if you drive the car more kilometers than agreed in the contract (more kilometers), you will have to pay for each additional kilometer you drive. If you drive less than agreed (low mileage), the corresponding amount will either be paid out or offset, depending on the contract. If the lease has expired, you must either return the car to the lessor or arrange a follow-on lease.
Tipmore kilometers are often more expensive than less kilometers, so you should think very carefully about how many kilometers you will drive in a year. It is best not only to estimate roughly, but to take your yearly calendar and make an invoice. For example, it is noticeable that the trip to the great aunt’s birthday can add a few kilometers to the bill.
When you return the vehicle after the mileage lease, it will be closely examined. Any traces of use are at the expense of the leasing company. Defects and damages, on the other hand, you will have to pay. This is the so-called depreciation value, i.e. the difference between a car with the same equipment and normal wear and tear and the actual value of your damaged car.
The lessor must prove the reduction in value, which is why he usually has an expert come to the site. The expert will then draw up a return protocol, which you should be sure to check. If you disagree with the condition of the car, make a note of this on the report, sign your comments and talk to the lessor. If a legal dispute should arise later, this return protocol is decisive.
Is zero leasing advisable?
Zero lease offers are not only quite new, but also relatively rare. The basis for calculating the leasing rate is the list price of the vehicle. you do not have to pay interest on a zero lease. However, the list price is often far higher than the price you would have to pay as a financing or cash customer. So the zero leasing can very quickly turn out to be a pure lure offer.
What does the monthly leasing rate depend on??
The monthly leasing rate is made up of various individual items and is calculated in a more complicated way than a credit rate. The individual items are combined by the lessor according to your wishes, which is why no two offers are the same. The following individual items can influence the amount of the leasing rate:
- Vehicle selection: here it is not only about the list price of the car, but also about the equipment. The monthly rate for an opel corsa with basic equipment would be much lower than the rate for a BMW 5 series with special equipment. The more expensive the vehicle and the more extensive the special equipment, the higher the rate.
- depreciationA new car loses a lot of value in the first year. This loss of value is influenced by a number of factors, such as the make and type of the car. For a car with a stable value, the leasing rate is usually lower than for a vehicle that loses value very quickly.
Where do additional costs arise with private leasing??
During the contract period you are obliged to maintain and service the vehicle. You must have the regular inspections carried out at a brand-name workshop and pay for them yourself, as well as for any repairs that may be necessary. Compared to independent garages, the costs are much higher, so you have to take them into account when leasing a car.
Although some leasing companies offer full-service leasing that includes these costs, the monthly leasing rate increases as a result. It may be that a full-service lease is cheaper than having to pay for each visit to the garage yourself. Unfortunately, this cannot be predicted.
The majority of leasing companies require that you take out comprehensive insurance for the car. The premiums for such an insurance are much higher than for a partially comprehensive insurance. Here, too, most leasing companies offer a service package that already includes comprehensive insurance.
In addition, a GAP insurance (lease loss insurance) is often offered, which covers the difference between the outstanding lease payments and the amount paid by the fully comprehensive insurance in case of a total loss. An all-round carefree package is convenient, but there is usually a surcharge here, which is why you should carry out an insurance comparison.
How to recognize a good leasing offer
The leasing factor gives you a rough idea of how good a leasing offer really is. The following applies here:
- Top offer: leasing factor less than 0.7
- Very good offer: leasing factor less than 1.0
- Good offer: leasing factor less than 1.3
If, for example, the list price of the vehicle is 7900 euros and the monthly leasing rate is 117 euros, the leasing factor is calculated as follows:
117 / 7.900 * 100 = 1,4
In this example, the leasing offer would not be very advantageous. If, on the other hand, the list price would be 18.If the leasing rate is 160 euros, the leasing factor would be 0.9, which is a very good offer.
The leasing factor gives you a rough guide, but you have to consider other factors in the overall evaluation of a leasing offer. Leasing providers may charge additional handling fees and transfer costs. When calculating the leasing factor, these additional costs are not taken into account.
Where to conclude a private leasing contract?
Almost all large car dealerships offer private leasing in addition to commercial leasing. There are also numerous providers on the internet who offer private leasing of new or used vehicles. each leasing company has its own philosophy and sets its own leasing rules. Standard contracts do not exist, so you are forced to compare offers very carefully.
Can a private leasing contract be terminated??
As a lessee, you must be aware that you cannot normally terminate the leasing contract. If your income situation is unregulated and uncertain, you should definitely reconsider your decision in favor of private leasing, as you may incur incalculable costs due to contractual penalties. You cannot get out of the leasing contract in case of an accident with total loss.
The lease cannot be terminated by either the lessor or the lessee without a particularly serious reason. In principle, you can terminate the leasing contract, but the lessor must agree to the termination. As a result, you will incur compensation payments.
What requirements must lessees meet?
For both commercial and private vehicle leasing, a positive credit rating (creditworthiness) is the most important prerequisite. Individuals must have a regular income and be able to pay the monthly lease payments. Often, the lessor will also require the individual to prove that income is secure for the duration of the lease term. Employees with a fixed-term contract may find it difficult to meet this requirement. The same applies to minijobbers.
If the conditions are not fulfilled or only partially fulfilled, it is possible to pay a deposit of approximately 20 to 30 percent of the value of the vehicle. A guarantor can also be used if he is creditworthy.
What is used car leasing?
With classic leasing, only new vehicles are offered. It is also possible to lease an older vehicle. Leasing companies often advertise that leasing a used car is less depreciating. While this is true, the risk associated with leasing a used car in terms of incalculable maintenance and repair costs is often underestimated. Used vehicles no longer have a warranty or manufacturer’s guarantee and, depending on the condition of the vehicle, the leasing period can become a costly bottomless pit.
Leasing for the self-employed is also worthwhile for private use?
For self-employed persons and freelancers, leasing is worthwhile from a tax point of view if the car is used more than 50 percent for commercial or business purposes. You can then use the leased vehicle privately and still claim the costs for the car itself completely as business expenses. It’s a different story with the costs you incur for private trips, for example for gasoline.
We have summarized our findings on private leasing for you in this information section:
