Leasing or purchase?

When it comes time to change cars or buy one for the first time, you have the choice between buying or leasing. This choice isn’t always easy. To make the right decision, you must first consider several factors. The choice will depend on the cost of the car, whether it’s new or used, your monthly car budget, your annual mileage, and the length of time you plan to keep it. Buying or leasing a car: the differences

Whatever type of vehicle you’re interested in (make, model, or range), you’ll always have the choice between these two payment methods if you contact a professional. It’s crucial to choose a reputable network. Only use a certified professional, such as a dealership for buying, or a leasing specialist like Loueruneauto.fr for leasing. Not only will your transactions be secure, but you will also benefit from some significant guarantees.

Buying a car with cash The more modern cars become, the more expensive they are, and the more difficult it becomes to buy one outright without borrowing a large sum from a bank. In the vast majority of cases, those who opt for a cash purchase take out a traditional loan from a bank or credit institution. Before signing up, it is important to carefully assess your repayment capacity. Obviously, buying a vehicle on credit will be more expensive than buying it outright, given the interest. However, parting with a large sum in a single transaction can leave you financially vulnerable in emergency situations. Those who are more calculating will compare the interest their savings can generate with the interest they would pay on a loan repayment.

Furthermore, buying is the ideal solution if you plan to keep your car for a long period (5 years or more). Since you become the owner at the time of purchase, you have no restrictions on its use. You manage your mileage and maintenance freely. By buying outright, you can also resell the vehicle at any time. Car Leasing

When it comes to car leasing, you generally have two options: long-term rental (LLD) and lease with option to buy (LOA).

LLD typically lasts between 24 and 48 months. Some providers offer up to 72 months. LLD involves renting a car for a predetermined period with the option to subscribe to additional services such as insurance, maintenance, or a fuel card. Long-term leasing (LLD) differs from other financing methods in that the customer does not have the option to become the owner. There is no purchase option with a long-term lease. The car must be returned to the leasing company when the contract expires. It is therefore a solution for drivers who like to change cars regularly. Lease with option to buy (LOA) is a type of finance lease. The conditions are essentially the same as for LLD, with fixed monthly payments and services such as insurance and maintenance. However, LOA differs from LLD in one very important way. As its name suggests, this financing allows the customer to purchase the vehicle when the contract ends. If the customer decides to buy it, they will have to pay the residual value of the car to become the outright owner.

Generally, a lease agreement subjects the user to certain conditions. Most car leasing companies require adherence to a mileage limit (10,000 to 15,000 km per year) and the vehicle’s condition upon return to the lessor.

Car leasing Why choose car leasing?

This new financing method not only simplifies life for households but also for businesses. Having the option to use a car or even own one by paying over several months or years is a real advantage.

With car leasing, monthly payments are lower than those of traditional loans. Individuals can thus better manage their car budget. Increasingly, leasing companies no longer require a down payment, whether for long-term leasing (LLD) or lease-purchase (LOA). Previously, a deposit equivalent to 10% to 20% of the vehicle’s value was required in most cases. Access to various services is also one of the strengths of leasing. A growing number of dealerships are offering this type of financing to sell or lease more cars. They have understood that leasing represents the future of the automotive industry. Another advantage: the vehicle registration certificate is free for the duration of the lease. If the purchase option is exercised, however, the customer must obtain a new registration certificate at their own expense.

Businesses are less demanding regarding mileage overruns and minor damage other than normal wear and tear if you are willing to lease them another car. The rapid growth of the leasing market is also due to businesses increasingly turning to leasing. Leasing is considered a more secure and financially advantageous solution for regularly renewing company vehicle fleets. Car purchase, car rental

Since the 2010s, the leasing market has grown significantly. Leasing has overtaken traditional loans, and the figures continue to rise. Today, leasing accounts for approximately 80% of car financing. Lease-to-own (LOA) is the most popular financing option. In 2020, over 75% of new cars were financed through LOA.

However, it still lags behind the used car market. That same year, LOA for used cars represented approximately 15% of acquisitions. While this figure may seem relatively low, the growth is real, as the previous year, LOA accounted for around 13%.Note that in 2013, the share of LOA was still at 42% for the financing of new cars, then it climbed to 73% in 2017.