How do you finance your new car? With a loan or leasing?
Which car financing is worthwhile?
If you want a new car, you have to finance it. This is usually done through leasing, which allows you to use the car, or a car loan. Then you own the car. Find out here what the advantages and disadvantages of the two types of financing are. Do you want to buy a sports car, a family estate, a minivan or your first own car? To finance your dream, you can take out a car loan or lease the car. What are the advantages and disadvantages? bob Finance will enlighten you.
Advantages and disadvantages of leasing and car loans at a glance
As with everything in life, there are two sides to the coin when it comes to car loans and leasing. Decide which suits you better.
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Car Loan
- Own the car from the start
- Cheaper overall than leasing
- Possibility of selling in the event of financial problems
- No obligation to take out expensive comprehensive insurance
- Higher interest rates, as no collateral is deposited
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Leasing
- Frequent changeover to a new car possible
- Low monthly rate
- Sale or rental not possible
- Expensive comprehensive insurance compulsory
- Additional costs if agreed mileage is exceeded
- Service must be carried out in brand garages
- Subsequent costs in case of premature termination
Car loan is owning, leasing is using
Finance your car purchase by taking out a car loan, then the vehicle is yours. You decide if and when you sell it on and how you insure it. It's different with leasing. When you lease a car, the lessor owns it and you get to use it. You pay the lessor a monthly instalment. When the leasing contract expires, you can take over the car or return it and sign a contract for a new vehicle.
Is leasing a favourable alternative to a car loan?
No. With leasing, you pay small monthly amounts, but the car belongs to the lessor. You are only allowed to use it. When the leasing term expires, you return the car or pay the residual value and take it over. With low leasing rates, car dealers also motivate customers with a small budget to lease a car. The catch: however, a leasing contract entails many costs that can be avoided with a car loan, such as expensive comprehensive insurance or car servicing in brand garages - both a must for lessees.