A new car is needed: finance or lease? No money in the bank account. Nevertheless a new vehicle must her? If there are no reserves for a personal vehicle in college, a loan or lease can help. For private individuals, traditional credit is generally more suitable for financing vehicles and offers good transparency of costs.
Leasing: consider the pros and cons
Whether someone chooses to finance through a loan or enter into a lease agreement: Both variants have advantages and disadvantages. This should be reviewed before making a final decision in any case. Leasing often involves financing new and annual cars, which can be tempting at first glance. The condition of the cars is usually very good.
For private individuals, however, financing a vehicle under a leasing contract is usually not worthwhile. This is due to the fact that private individuals can not claim the rates for tax purposes.
The situation is different, however, for self-employed persons: They can deduct the leasing installments from their taxes. Even if the car is used mainly for business, it will be difficult to deduct the installments in the tax return. A loan is usually the better option here.
This speaks for a loan with private individuals
In addition, it must be remembered that the borrower becomes the owner of the vehicle immediately after repayment. Leasing is different: Here, the leasing bank or the leasing company remains the sole partner. The leasing company initially owner, even if the installments are fully paid off. If the car is still to change hands, the most common method is for the lessee to pay the residual value after the lease expires. Only then is ownership transferred to the lessee.
Besides this legal thing, there is something else that speaks in favor of a loan agreement. With a classic loan for financing, there is greater transparency in the costs: it is easy to see what still has to be paid. The installments are easy to plan and it is generally easier to keep track of what is coming up financially.