Private leasing – how leasing works for private individuals

Private leasing : This is how leasing for private individuals works

Leasing contract - your rights at the conclusion and termination of the contract at a glance

Is leasing really an all-round carefree package that is also worthwhile privately? Where can be hidden costs? Here you can get tips and information on private leasing.

Companies and freelancers often resort to vehicle 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??

When you lease a vehicle privately, you are not the owner, but merely receive the right to use the car. The term “leasing” comes from the English language means “leasing”, why you are the lessee of the car, whereas if you finance it with a loan, you become the owner of the car as soon as it is paid off. If you would like 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?

Here, it is determined 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 value of the vehicle plus fees and interest and less the calculated residual value. The higher the residual value and the longer the contract term, the lower the leasing rate.

TipHowever, if the residual value is set too high, you will also have to make a large additional payment in the end. Therefore, it is important that the calculated residual value is congruent with the actual vehicle value and is agreed on the basis of the dealer purchase price and not the dealer sale price. The dealer selling price can in fact be up to 15 percent higher than the purchase price.

In addition to the residual value, the contract period, the leasing rate and the conditions, other agreements can be made in the leasing contract. This is where the so-called right of tender comes into play: the lessee is obliged to buy the car under certain conditions when the leasing contract expires and thus assumes the residual value risk.

Another type of contract is “car leasing with surplus revenue sharing”: the lessee is entitled to sell the vehicle to someone else at the end of the leasing contract. If the sale price is lower than the residual value, the lessee is obliged to pay the difference. If the sale price is higher than the residual value, which is very unlikely, the lessee will receive the additional profit.

  • back
  • more

What does kilometer leasing mean??

In kilometer leasing, the contract is calculated based on the number of kilometers traveled per year. The kilometers per year are usually between 10.000 and 20.000 kilometers. For frequent drivers there are special contracts, as well as for few drivers (z. B. weekend vehicles). Compared to residual value leasing, here you don’t have to worry about the car losing value.

However, if you travel more kilometers with the car than contractually agreed (additional kilometers), you will have to pay for every single additional kilometer. If you drive less than agreed (reduced mileage), the corresponding amount will either be paid out or offset, depending on the contract. Once the leasing contract has expired, you must either return the car to the lessor or arrange a follow-up 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 to make a rough estimate, but to take your annual calendar and create 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 inspected. Traces of use are at the expense of the leasing company. Defects and damage, on the other hand, you have to pay for. It is the so-called diminished value, that is, the difference between a car with the same equipment usual wear and tear and the actual value of your damaged car.

The lessor must prove the depreciation, which is why he usually calls in an expert. The expert then draws up a return protocol, which you should definitely check. If you disagree with the condition of the car, make a note of it in the report, sign your comments and talk to the lessor. If there is a legal dispute later, this return protocol is decisive.

Is zero leasing advisable??

Zero lease offers are not only fairly 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 with zero leasing. Often, however, the list price is far higher than the price you would have to pay as a financing or cash customer. Thus the zero leasing can turn out very fast as pure enticement offer.

What does the amount of 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 loan rate. The individual items are combined by the lessor according to your wishes, which is why no two offers are alike. The following individual items can have an influence on the amount of the leasing rate:

  • Vehicle choiceHere it is not only about the list price of the car, but also about the equipment. For example, 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 following applies: The more expensive the vehicle and the more extensive the special equipment – the higher the rate.
  • DepreciationA new car suffers a considerable loss of value in the first year. This depreciation is influenced by several factors, such as the make and type of the car. The leasing rate for a car with stable value is usually lower than for a car that depreciates 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 inspection appointments carried out at a brand workshop and pay for them yourself, as well as any repairs that may be required. Compared to independent workshops, the costs incurred here are considerably higher, so you must factor these in when leasing a vehicle.

Some leasing companies offer full-service leasing, in which these costs are already included, but this in turn increases the monthly leasing rate. It may be that a full-service lease is cheaper than having to pay for each workshop visit yourself. Unfortunately, this cannot be predicted.

Most leasing companies require that you take out comprehensive insurance for the car. The premiums for such an insurance are much higher than for a partial cover insurance. Again, most leasing companies offer a service package that 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 comprehensive insurance in case of a total loss. While an all-inclusive package is convenient, there is usually still a surcharge here, which is why you should do an insurance comparison.

This is how you can recognize a good leasing offer

The so called leasing factor gives you a rough orientation how good a leasing offer really is. Here we have:

  • 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 the list price of the vehicle is, for example, 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 lease offer would not be very advantageous. If, on the other hand, the list price were 18.000 Euro and the leasing rate is 160 Euro, the leasing factor would be 0.9 and thus a very good offer.

The lease factor gives you a rough direction, but you need to include other factors in the overall evaluation of a lease 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 major car dealerships offer private leasing in addition to commercial leasing. Also in the Internet numerous offerers are found, who offer the private leasing of new or used vehicles. Each leasing company has its own philosophy and establishes 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 need to be aware that you usually cannot terminate the lease agreement. If your income is not regulated and uncertain, you should definitely reconsider your decision for private leasing, because it can come through contractual penalties incalculable costs on them. From the leasing contract you do not get out even in an accident with total loss.

Neither the lessor nor the lessee can terminate the leasing contract without a particularly serious reason. In principle, there is the possibility that 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 also requires that the private person must prove that the income is secured over the length of the leasing contract period. Workers with a temporary contract may find it difficult to fulfill this requirement. The same applies to mini-jobbers.

If the requirements are not met, or are only partially met, there is the option of paying a deposit, which is 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 the classical leasing exclusively new vehicles are offered. But it is also possible to lease an older vehicle. Leasing companies often advertise that leasing a used car has a lower depreciation rate. Although this is true, the risk associated with used car leasing in terms of incalculable maintenance and repair costs is often underestimated. Used vehicles no longer enjoy a warranty or manufacturer’s guarantee and, depending on the condition of the vehicle, the leasing period can become a cost-intensive bottomless pit.

Is leasing also worthwhile privately for the self-employed??

For the self-employed or professionals 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 also use the leased vehicle privately and still claim the costs for the car itself completely as business expenses. It looks different with the costs, which cause you by the private journeys, for example for the gasoline.

We have summarized our conclusion on private leasing for you in this info section:

Like this post? Please share to your friends:
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: