What are the costs of auto leasing?

Why buy a vehicle when you can opt for a leasing contract? In terms of costs in particular, leasing a vehicle is significantly cheaper, although this depends on the vehicle, how it is used and its age. Perhaps you are stepping into a cost trap when you want to lease a particular car. Therefore the question arises: What costs can be expected with car leasing? We take a close look!

A little example

The big problem with getting the exact cost of a lease is that there are many different factors at play today. First and foremost, it depends on which vehicle you choose. Since it would be too time-consuming to really take a close look at every vehicle model, we decide on one of the most popular German cars: the VW Golf. The 1,5 TSI ACT engine with 150 PS makes it ideal for everyday use. We opt for the middle version in terms of equipment, which goes by the name of “VW Comfortline”. We are also restricting the leasing contract a little. We decided on an offer with a performance of 20.000 kilometers and a term of two years. A standard contract like the one available from many providers. With this example we can now show you what costs you will have to pay.

The list price of our vehicle mentioned above is around 26.000 euros. Even with the down payment it depends on what you choose and how much you pay in the end. If you have a good credit rating, you do not have to pay a deposit. But if you want to keep the monthly installments smaller, a down payment is usually the better solution. The difference between the two types is enormous. If you make a deposit, you would have to pay 10 to 30 percent of the list price beforehand.

This is followed by the costs for transportation and admission. If you have previously decided on a luxury car, you can easily put a four-digit amount on the table here. The price of the Golf is around 700 euros. Of course, a number of factors also play a role here, such as the distance between the automobile plant and the dealer. Practical: Some manufacturers, such as VW, allow collection at the factory. However, visiting the factory is not free. You easily have to pay 350 euros. This is followed by the registration of the car, otherwise you will not be allowed to drive on the street. Here a problem arises: the administrative act is not subject to any nationwide fee schedule. This means that the prices can vary greatly on site. We assume an average of 100 euros.

The thing about the installments

Now we come to the most important point of leasing: the rates. Installments are due every month that you have to pay to the company. How high the installments are depends on the leasing contract. The leasing contract stipulates which model you have chosen, how high the mileage is and how long the contract runs. It is good that you can adapt today's contracts to your needs. For example, you don't need 45.000 kilometers per year, just 15.000 kilometers. You can have this adjusted in order to reduce costs. As already mentioned, a down payment also pushes the monthly payments down. Take a look at our example: If you previously made a down payment of 20 percent, the installments are now around 200 euros per month. If, on the other hand, you waive the deposit, you have to pay 330 euros. Therefore, you should consider beforehand whether you would rather make a down payment, but have to raise less money every month.

The other cost items

Unfortunately, the installments are not enough, because you will have to pay more. Including the vehicle tax and insurance. These points also depend on the vehicle and many small details. We look again at our example. With the model we have chosen, the annual vehicle tax is around 80 euros. Insurance, again, is a case in itself. It increases if you were involved in an accident. It doesn't matter whether it was your fault or not. Depending on the desired services, you have to reckon with around 600 euros per year. In addition to these two cost factors, there are also inspections, repairs and maintenance. An inspection easily costs 250 euros and a TÜV test another 100 euros.

Is leasing really cheaper?

The first year is always the most expensive with a leased vehicle, because now you also have to register the vehicle and have it transferred. You can easily put more than 5.000 euros on the table in the first year. In the second year, however, a leasing car is significantly cheaper. Now you only have to pay the regular costs like installments, insurance, taxes, inspections and maintenance. The costs are now reduced by around 1.000 euros. Of course, depending on what you're doing and what services are included. Important: You also have to pay taxes, insurance, inspections, repairs and more for a vehicle that has been purchased. Therefore, think carefully about whether you can afford a leasing vehicle every month.

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