Leasing contracts increasing
Leasing contracts are becoming increasingly important for vehicle financing. According to the Consumer site, shoppers are increasingly opting for leasing instead of traditional car financing via installment credit.
The portal sees the greatest advantage of a leasing contract in the limited useful life, which makes it possible to get a new car every two to three years. Overall, however, the purchase price for leasing is significantly higher.
Leasing is often compared to a rental agreement. At the beginning of the contract, a one-off payment becomes payable, which is then followed by current installments, which are based on the useful life and thus the expected loss of value of the vehicle. The contract period can usually be chosen individually.
The most favorable option
Whether a installment loan, a balloon financing or a leasing contract is the most favorable option can only be reliably determined on the basis of the present value. The present value is the amount of money that would have to exist on an imaginary account to cover all payment obligations arising from financing.
Different payment times
The different payment times are taken into account. Also investment interest, which can be taken if larger payments take place later and the liquidity is spared, can be included in such calculations. The present value method is more reliable than the amount of the monthly installments or the down payment. Financing costs are cleverly hidden in many financing offers. This is possible, for example, by “crooked” terms.
The comparability of car financing is often made even more difficult by providers by linking value added services with the contract. These may be, for example, insurance and warranty packages.
The complicated contract design of many car loans makes classic installment loans more attractive: If you want to finance a vehicle, you do not have to limit your search for a loan to explicitly designated as such car loans. Simple consumer loans without purpose and security are often the best solution.