If you want to buy a new car, you will be faced with the following question. Leasing, financing or cash purchase? But which way is the most suitable? We present the various options.
In 2019, according to a representative survey of the German-speaking population aged 14 and over, there were around 2.59 million people with more than three or more cars in their households. The majority of respondents (36.62 million) owned only one car in the previous year, while 13.96 million households did not own a vehicle at all. This means that the figures remained at approximately the same level as in the previous year, as can be seen from the introduction to the graph. This evaluation shows how many passenger cars there were in Germany between 2016 and 2019.
But how do those who can call a passenger car their own get it? Is financing, leasing or even paying cash more attractive, and what options do those without a drivable vehicle have??
Cash payment for used cars
Most vehicle owners pay for their vehicle in one go. This is shown by a look at the Gfk market study 2018. 68 percent of all used car owners buy their vehicle without leasing, credit or financing; among new car owners, the figure is 55 percent. The average of all car owners surveyed shows: 38 percent use some form of financing to obtain a vehicle.
This figure includes both loan financing and leasing contracts. A look at the most popular forms of financing shows that 67 percent of those who finance their vehicle use an installment loan for this purpose. 22 percent rely on a leasing contract and 21 percent use three-way financing.
Thus the installment credit is independently of the kind of the vehicle (new car or used car) the most popular variant, if a vehicle cannot or is not to be paid for at one blow. It is possible that the low prime rate will lead to a further shift in the long term, as banks are currently offering particularly favorable interest rates for installment loans.
Relying on cash discounts
In principle, however, there are other forms of vehicle financing, such as dealer credit financing. However, experts believe that it makes more economic sense to negotiate two contracts separately: An installment loan with a bank and a purchase agreement with a car dealer. Sample calculations show that even if interest costs are incurred, the cash rebate can not only depress the monthly payment, but also make the overall cost of vehicle financing more favorable than dealer financing.
Leasing is no longer the declared route for vehicle acquisition, even for companies. This was shown in a recently published study, from which it emerged that even self-employed persons and tradesmen tend more and more to purchase vehicles and sweep even such attractive leasing offers off the table. From the point of view of the self-employed and entrepreneurs, it is primarily the expensive leasing rates, the administration of the leasing contracts and the scratches on the company vehicle that could become significantly more problematic with a leased vehicle than with a purchased vehicle. According to the study, 61 percent of a total of 304 respondents opted to buy a company vehicle; 36 percent opted for leasing contracts.
Cost considerations, above all, have led buyers to become purchasers rather than lessees – not only in terms of purchasing the vehicle, but also in terms of the costs incurred when returning the vehicle and in the event of any damages. Around one-third of respondents reject leasing models because they see them as a debt option and they are convinced that ownership is more attractive than leasing.
All-round service is valued in leasing
Those who belong to the minority and lease their vehicle consider vehicle services, handling of return damage, accident management and claims service, as well as services such as appointments at the workshop and special conditions for insurance and accessories to be interesting. The same reasons also motivate car buyers to regularly take a look at manufacturers' leasing offers. Obtain information primarily from the Internet (66 percent), car dealerships (53 percent) and vehicle brochures (20 percent).
Arguably, the most important argument that leasing providers should address to both tradespeople and individuals would be the idea of liquidity protection, meaning that those who lease continue to have the financial resources that would otherwise have been spent to purchase the vehicle. This in turn means that more money is left over for commercial investments or private purchases.
Special offers from manufacturers
Who is not yet clear about which vehicle or even which financing option it should be, can test for the first time, for example, at Volkswagen Financial Services. Exclusive car models, such as the S models from Audi or the VW Golf GTI, can be found in the Special Cars section. After a look in the category "Desired car" car dreams can be fulfilled -. Although both for a special occasion, such as a wedding, and for the pure pleasure of driving. In addition to Audi and VW, Seat and Skoda are available here, even commercial vehicles of the VW brand can be "wished" and booked here.
The garage replacement car is a service that only those who have their car in an appropriate garage can benefit from. For those who want to test whether a leased car is the right option, go for the business offers for business customers, or as an individual, go for the long-term rental, which can last from 30 to 365 days. Also, VW's diverse offer in this area is an option for all those who actually travel by public transport all year round and then – for example, for a family vacation – still need a vehicle on wheels. Alone in Germany 13,96 million households fall into the category of the "car-free" households, as the statistics mentioned showed.