How does car leasing work? Easily explained

If you want to buy a new car, car leasing is an alternative to buying. We show you how leasing works and for whom it is worthwhile.

Car leasing: what is it actually?

• The term leasing means something like "renting" or "leasing". The most common and easiest to understand form of leasing is car leasing.
• The conclusion of a leasing contract can be compared to a rental contract. The car dealer will provide you with the vehicle for a certain period of time. You pay a monthly fee for this, the rent for the car.

Simply explained: This is how car leasing works

• The term of a leasing contract is usually between 2 and 5 years. The car belongs to the dealer purely legally, for a fee (the rent) you receive a temporary right of use. However, you have to pay for repairs, maintenance and insurance yourself.
• There are some restrictions so that the leasing is financially worthwhile for the dealer. The maximum mileage, i.e. the kilometers driven, are determined beforehand. If the value is exceeded, you will also be asked to checkout. Fully comprehensive insurance and a commitment to authorized workshops are also often part of leasing contracts.
• If the leasing contract expires after a few years, you can directly sign a new contract for a new car. The dealer has to take care of the sale of the car. Alternatively, you can then buy the car yourself.

Overview of advantages and disadvantages of car leasing

• Leasing has several advantages. If you are short of cash due to other high expenses or if you are self-employed, buying a car is often not advisable. Leasing costs a few hundred euros per month, which can be precisely planned.
• The self-employed can even deduct the monthly installments from the tax. Since you always get a new car through leasing, the cost of repairs remains very manageable. On the one hand, new cars are less prone to expensive damage, and on the other hand, many damages are covered by the guarantee in the first few years.
• You can only use the car through a leasing contract, it is not yours. Even small scratches must be repaired immediately by the contract. Leasing contracts can also be quite expensive for frequent drivers. Here, buying and later selling a new car can be more worthwhile.

Lease an electric car

You can find everything about electric cars on our e-mobility portal EFahrer.com. There you can also arrange test drives to lease or buy an electric car.

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