The choice of car leasing for many entrepreneurs is more profitable and more convenient than a bank loan. Check if this solution is equally attractive when you don’t run your own business.
What is leasing?
Leasing is a great alternative to a cash loan or car loan when you want to buy a car. Leasing costs can be much lower than loan costs. This is because the leasing company is the formal owner of the car and also earns the opportunity to make depreciation charges for the car you use.
When you lease a vehicle, you pay regular installments for it. Until complete repayment, you are not the formal owner of the car.
The leasing company appears on the registration certificate until the day when you pay all leasing installments and buy the vehicle. What’s more – it’s worth knowing that you have the right to priority to buy the vehicle. Its price is often only 1% of the initial value of the car.
Leasing was usually associated with a solution for companies. It was associated with significant savings on taxes.
Consumer leasing – is it worth using consumer leasing?
After the entry into force of the T recommendation, banks have a much more restrictive approach to granting loans and check their clients more thoroughly. That is why it may be beneficial for you to lease a vehicle when you do not run a business. The advantages of this solution can be without hesitation:
- Minimizing formalities.
- More favorable conditions that the leasing company may offer you are insurance on better terms. However, remember that when leasing it is necessary to buy AC and NNW, not only liability insurance. You get more protection, but with it, you incur higher costs.
- Flexibility in choosing the vehicle you want to lease. With its help, you will finance cars, motorbikes, quads and other vehicles. This way you can finance new or multi-year used vehicles.
- Discounts with leasing company partners will help you save on car equipment and many services.
- The consumer leasing liability is not reported in the credit history.
Disadvantages of consumer leasing
Consumer leasing is not only advantages, but many people also may not decide on this type of financing because:
- the leased vehicle is not your property,
- when the car is stolen or total damage arises, the leasing contract expires,
- it is necessary to take out additional insurance.
Consumer leasing and car loan – what is cheaper?
A car loan is certainly much more time consuming than consumer leasing and requires more documents. Consumer leasing increases your credit standing.
This means that you can spend more on your car than you could spend financing a car purchase with a car loan. As with other forms of financing, there is no comparison between consumer leasing and car loans.
Without calculation, it is difficult to determine which of these two options pays off more. It is worth comparing offers very carefully. You can use the tools available on the web – it will certainly shorten your search time.
Good to know…
Leasing service costs may be higher than those that appear when you want to use a car loan. In the case of consumer leasing, you won’t save on insurance or servicing the vehicle at authorized points. On the other hand, you can lower the price of the car thanks to numerous discounts from partners of leasing companies.
Consumer leasing is still much more popular in the west, e.g. in Germany or Great Britain. In Poland, it is still associated with a typical company product.