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Comparison: Buying, financing or leasing a car – which is the better solution for whom | message

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Buying a car should always be well thought out, because the decision is not just about money, but may also have long-term effects in the future. In order to make the right choice between cash purchase, financing or leasing, the respective requirements and wishes of the buyer must be taken into account.

Buy car cash

Cash purchase is probably the easiest option. The entire purchase price is paid to the dealer in one fell swoop and the car becomes the property of the buyer. The prerequisite for being able to use this option is to have the full amount freely available. Since there are no further payments in the future, there are also no additional fees or interest. In addition, many merchants grant juicy discounts if they receive the money immediately. The disadvantage of buying in cash is the high one-time expense. The outflowing capital can no longer be used by the buyer for other purposes. Even after payment, however, the consumer should have a sufficient financial buffer to be able to react to possible emergencies.

Finance a car

When financing, the entire payment for the car is divided into monthly installments. There are different models. In addition to the conventional variant, in which the same installments are regularly made over a specified period, a so-called balloon loan is also possible. Relatively low installments are due at the beginning of the contract period. At the end there is then a large remaining amount. This must either be paid in one fell swoop or as part of further financing. However, the terms of follow-up financing are usually much worse than before. A modification of the balloon loan is the three-way financing. This supplements the loan with a down payment and offers the buyer the additional option of returning the car to the dealer before the final installment and not paying the remaining amount.
The advantages of car financing lie in the split payment. This means that the customer does not have to pay the full purchase price immediately. With the exception of zero percent financing, this also entails interest. In addition, financing is only worthwhile if you want to keep the car for at least five years. According to Focus Online, an early sale would be a losing proposition as the value of the car would drop by more than half within the first three years. If you like to change your car, you should use the leasing option.

Lease a car

In contrast to buying and financing, leasing does not involve purchasing the car. The lessee pays a monthly installment and returns the car to the dealer at the end of the contract. The rate is based on the annual kilometers driven, which must be specified in advance. The driver should estimate the number of kilometers realistically and not exceed it, otherwise he will have to make a relatively high final payment. For the self-employed and companies, leasing, in contrast to financing, has the advantage that the installments can be deducted from tax. For private customers, the focus is more on flexibility. The duration of the contract can be set according to individual needs. The vehicle model can be changed more often due to short running times. In addition, the lessee always gets new cars. The manufacturer’s guarantee means that no repairs due to wear and tear have to be paid for. In addition, a full-service package can be taken out, whereby all costs for maintenance, inspection and repairs are covered by the lessor. Nevertheless, the car should be handled carefully. If there are any defects in the return, high additional payments may result.

Finanzen.net editorial team

Image sources: inxti / Shutterstock.com, Andrey Chmelyov / Shutterstock.com



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