These five tips will help you lease a car the right way

For many people, leasing a vehicle is a viable alternative to buying one – but only very few know what to look out for when doing so. Here are five tips.

While leasing used to be mainly used by business people because of the tax advantages, in times of "using instead of owning" it has become more and more popular to use a leasing system more and more private people are opting for leasing. Because leasing offers several advantages.

These are the advantages of leasing

• Low monthly costs instead of high purchase price.
• High flexibility due to freely selectable lease terms.
• Wide selection of all models from almost all manufacturers.
• Individual offers for your own needs.
• Modern cars with the latest technology.

So there are many good reasons to choose a leased vehicle. But as diverse as the reasons for leasing are, so are the offers and suppliers. To make the search for the dream car as easy as possible and enable novices to enjoy their first leased vehicle without worries, online leasing provider vehiculum has summarized the five biggest leasing mistakes – and how to avoid them.

1. Compare offers

The rates for the same car can differ by a few hundred euros per month, depending on the provider. This quickly adds up to several thousand euros over the term of the contract. That’s why it’s also important to compare offers when leasing. The so-called leasing factor helps here. This is made up of two factors:

• the monthly rate and
• The gross list price of the car.

To calculate the leasing factor, divide the monthly rate by the list price and multiply the result by 100. For an offer with a monthly rate of 180 euros at a list price of 30 euros per month, the following applies.000 euro the calculation would be 180/30.000 = 0,006. The result is then multiplied by 100 to get a somewhat clearer value. The leasing factor in this case would be 0.006 * 100 = 0.6.

As a general rule: the lower the value, the better the offer. But be careful: only equivalent offers can be compared with each other, i.e. the contract term (e.g. 36 months) and the agreed mileage (e.g. 10.000 km/year) must be identical for the offers to be compared. In addition, possible transfer costs and special payments should be included in the monthly rate.

2. Mileage leasing

In principle, a distinction is made between the differentiate between mileage leasing and residual value leasing. In the case of residual value leasing, the lessor proposes the highest possible residual value in order to keep the monthly rate low. The customer pays with the monthly rate then the depreciation of the vehicle until the end of the contract. ÄHowever, if the residual value of the vehicle changes after the conclusion of the contract, the lessee must pay for the difference. The risk therefore lies with the customer.

In the case of mileage leasing, on the other hand, the leasing party pays a monthly rate based on the agreed mileage, cover the depreciation of the vehicle over the agreed period and mileage. If the residual value of the vehicle changes after conclusion of the contract, the lessor pays the difference. The risk therefore lies with the leasing party. This option is therefore clearly preferable, as it provides the lessee with financial security.

3. Take out GAP insurance

A fully and partially comprehensive plus liability insurance should resp. You have to conclude a leasing agreement with a car anyway. However, leasing novices may not know that GAP insurance is also highly recommended when it comes to financial security. If the leased car should be totaled, stolen, etc., the residual value of the leased car is calculated. If the vehicle is returned, the insurance usually only pays the replacement value of the vehicle at the time of the accident. However, the lessee must continue to pay the contractually agreed installments, which then usually result in a higher sum than the replacement value of the car.

In order to avoid paying the difference between the replacement value (reimbursed by the insurance) and the sum of the outstanding monthly installments to be paid to the lessor out of one’s own pocket, it is advisable to conclusion of a GAP insurance, also known as GAP coverage. If the customer takes out an insurance policy on his own, this request usually has to be specified separately.

4. objective return appraisal

The return of the leased car is still often associated with high costs, especially if damage to the vehicle is to be noted. However, the leased vehicle is another party’s property, which must be duly used and must be returned in the appropriate condition. Since the vehicle is left to the lessee, he is also responsible for any damage caused.

Therefore, it is advisable to find out before signing the contract about theto inform the lessee of any damage included in the installment (such as stone chips or minor scratches). In addition, it should be checked whether the leasing party uses an objective damage catalog, e.g. from TuV or DEKRA, when returning the vehicle in order to classify any defects on the vehicle. These catalogs are impartial and therefore offer the certainty that everything is in order when returning the vehicle.

5. procure tires yourself

If you want to use your leased vehicle in winter, you should also get the appropriate tires. That’s why car manufacturers often offer the tires as part of the leasing package. However, caution is advised here, because although the tires are paid off in full by the lessee via the monthly installment, they belong to the lessee at the end of the lease term including residual value still the manufacturer. It is therefore worth comparing whether the tires can be procured elsewhere and then transferred to the lessee’s own ownership in the end.