Car leasing. Opinions, dilemmas, pros and cons
When buying a car, we can choose between two options, namely between a car loan and leasing. Car loan is a special purpose loan . Most often, banks or other financial institutions that grant car loans cover 100% of the vehicle costs. Please note that the car loan does not only apply to cars but also to other motor vehicles.
The loan interest rate is set due to several factors, for example, the type of vehicle you intend to buy, whether it is used or new, the loan period, whether the interest rate is variable or fixed, and the currency in which the loan is taken. Of course, the institution that grants us this loan is also important. When taking a car loan, we can come across two options. One of them is the need to submit income declarations and the payment of own contribution, the other option allows us to take a loan without any formalities.
Financial institutions secure themselves against the inability to repay the loan
There are several types of loan collateral, namely a register kit, transfer of ownership, vehicle card deposit and assignment of AC policy rights. Generally speaking, leasing is the transfer of rights (for the use of a specific vehicle, whose lessor is the legal owner) by the lessor to the lessee who is obliged to pay a fee, i.e. the so-called leasing installments. Most often compared to the lease or rental of a given vehicle. These costs are covered from the current income of the company that benefits from the use of the equipment. Leasing is divided into financial or capital and operational or current.
Financial lease from operating lease differs
In that the operational time of use of a given good is usually shorter than the period of total consumption and it cannot contain a redemption clause, while in financial lease the duration of use usually lasts as long as the depreciation period of the item and it is possible to include buyout. In general, the cost of car loans and leasing depends on many factors, so you cannot compare them without specific offers from various institutions dealing with given forms of loans or leasing. However, apart from the monetary sphere, each of these possibilities has its pros and cons. Certainly, the disadvantage of a car loan is that it is still inconvenient for the borrower to secure the loan and, above all , registration sets . The main advantage of financing a car with a loan is primarily a lower cost than in the case of leasing. Other advantages of the loan may be spreading it into convenient installments or the possibility of early repayment .
Option to suspend the loan for some time
Another plus is the possibility (here: depending on the loan collateral) to sell and exchange the vehicle for another one while continuing to pay off the loan. In the case of leasing, this is impossible. Another advantage of the loan is the fact that after its repayment, we become the sole and legitimate owners of the vehicle. If we do not have a buyout clause in the case of leasing it becomes impossible. The owner is the lessor at all times. The advantage of leasing , however, is not involving too much own resources . Fees for leasing installments are fixed and unchanging. Another advantage of leasing is the possibility of transferring fees for any technical repairs of the vehicle, which are not the fault of the lessee. Taking a car loan, we can take almost any amount we need, which is not possible in the case of leasing because the minimum amount is 50,000 . Another difference between the two options is the repayment period , which in the case of a loan is a maximum of 10 years , and in the case of leasing, 5 years .