In principle, financial leasing is very similar to hire-purchase. A big difference is that with a hire purchase at the end of the repayment period you are the owner of the purchased product, which is not the case with financial leasing. In many cases, an option to purchase is included in the agreement for financial leasing. When you go into this, you legally own the product. This can be advantageous if the product to be paid off has a longer financial life than the term of the lease agreement.
In most cases, the monthly payment is lower than in the case of a hire purchase. This is because you do not pay for the residual value of the purchased product during the lease period. If you decide afterwards to become the owner of the product, this is still possible.
If you do not have sufficient capital to make a necessary purchase, such as when purchasing a car, financial leasing can be applied. This means that you immediately have the desired product for which you will then pay a fixed monthly amount for a previously agreed period. If you do not meet the obligations and less than 75% has been paid off, the company from which you lease can reclaim the product. Many people use financial leasing. It is widely applicable and suitable for anyone who is able to pay off the fixed monthly amount during the entire term. In addition, your private assets remain consumable and you simply receive interest on your savings, which you would otherwise have had to spend for the purchase of the product in question.
It is important that you realize in advance what you are starting. Make sure that you are certain that you can meet the monthly obligations during the term and whether entering into financial leasing is beneficial in your case. If this is the case, financial leasing can be a great solution to a problem and offer a solution in various situations. In many cases, it is not possible to borrow or repay more quickly during the term. When you see large purchases coming, it is wise to think about this carefully beforehand. The fact that your equity remains consumption is a big advantage. You simply receive interest on this and your assets can simply be spent when needed.
Leasing a car as a Private (Private) or a Private Lease.
More and more often it happens that people lease a car privately. This has a few reasons. First of all, it is of course true that you do not have to have equity to drive a car. Because when you start leasing, you pay a fixed amount per term, without having to pay the full purchase price immediately if you were to buy a car from a garage or dealer. You also know exactly where you stand. In most lease constructions maintenance and insurance are included in the package, so that you will not be confronted with surprises in the event of an accident or unforeseen technical problems. Fuel is not normally included in the lease package, that is for the account of the person who leases the car.
A disadvantage of private leasing is also that fixed amount per month. You normally conclude a lease contract for three or sometimes five years. Of course you now do not know what your financial situation will look like in a few years. It is possible that the lease car, which can now be paid easily, will soon be a sling around your neck due to unemployment, disability or the termination of a relationship. It is therefore important to estimate as well as possible whether the car is affordable now and later. After the lease term, the car can often be purchased at a good price from the lease company. You have always driven a car yourself and therefore know its history. In many cases it is interesting to consider taking over the car after the lease term and then continue to use it for a number of years. A lease car can be a great outcome, but think about the consequences when entering into an agreement so that you will not be confronted with surprises later.
It is perfectly possible to lease a used car.
Not only at leasing companies but also increasingly at the regular garage or dealer. Leasing a second-hand car has a number of disadvantages that you have to pay close attention to. When you enter into a lease contract, pay attention to the conditions. Certainly with a second-hand car it is important that matters such as maintenance and insurance are properly arranged in the lease contract. Therefore, make sure that when you choose to lease a second-hand car, you go to an authorized dealer who is well-regarded. For example, if maintenance is for your own account and is therefore not included in the lease contract, and you get a major problem with your car such as a broken engine, then it may be that your car has become completely worthless at a glance. However, you still have to meet your payment obligation until the end of the term of the lease contract.
If you are going to lease a second-hand car, it is often possible to purchase the car at the end of the term. In that case you know what you are buying. After all, you have driven it yourself for years. In many cases, the car can be taken over at an attractive price. Leasing a used car is often quite cheap. The largest write-off has already taken place, which you can immediately see in the monthly amount. Leasing a car is useful when you do not have the financial means at the time of purchase to purchase the car yourself. However, it is important to realize that you are entering into a payment obligation for a longer period. Make sure that you are sure that you can still perfectly meet this obligation even after a year or two.