The question is increasingly raised by motorists, how much is a car leasing and how much is a conventional credit, a choice that requires careful consideration. We explain everything about it.
If formerly buying a car was the symbol of a success and especially the ultimate solution to afford a vehicle, the rules have changed somewhat with the development of leasing offers. Little known a few years ago, leasing tends to become the inevitable vehicle. We buy less and less, consumption patterns have changed, now we consume according to his needs.
The question has the merit of being asked: is it really necessary to buy a car if it is to make 10 000 kms annual? Not sure that the operation is profitable. We must then measure the pros and cons between buying and renting, and if possible obtain the cost of both operations to be able to choose the best formula.
Buying a car usually means using a car loan, a loan that will require paying interest. We must take into account the cost of credit, the price of the vehicle but also its insurance. Interviews are also to be included in the calculation, as is the haircut of the car. The only good thing is the resale value.
On leasing, the driver can leave with a rent including the price of the car, the cost of the credit, the insurance and the interviews. The only difference is that it will have no resale value unless it opts for the LOA, the lease with option to purchase provides an option to buy back the vehicle. Starting over 5 years, we can easily compare the two offers, it is still necessary to have the amounts of the two offers at his disposal to be able to compare serenely, it implies to perform simulations.
The biggest difficulty in comparing conventional credit or leasing offers for a car is to have the same basis. That is to say that the vehicle must be identical (configuration, options, engine) and that the duration is equivalent, for example 3 or 5 years. Car buying specialists estimate that under 3 years, leasing is clearly more advantageous, especially when the annual mileage is low. Beyond 3 years, the purchase of a car is more appropriate because the resale value will exceed the leases.
To simulate, it is best to target a vehicle and get its price, through the manufacturer catalogs or auto agents. You then have to apply for a conventional car loan to get the cost of the credit and apply for a lease to get the cost of a LOA or LLD. Only then can the comparison be made.