How you can use the leasing factor to calculate the best offer
The time has come, you are about to buy a new car and you already know exactly what your dream car should look like. The choice of manufacturer and model has already been made and the financing option should be leasing.
But when looking for the right leasing vehicle, you quickly notice that the selection of offers is immense and difficult to keep track of. Because the terms of the leasing contracts can differ greatly. You therefore naturally want to take the best and cheapest option. However, this is not always that easy, as there is very often no objective comparison value. But with the so-called “leasing factor”, the comparative value can be calculated quite easily and you will always find the best offer.
How can the leasing factor be defined?
The conditions of the leasing offer are precisely evaluated by the leasing factor and it can be used as a tool for a comparison. To calculate this, only the gross list price and the monthly leasing rate are required. A very simple formula is used, the monthly rate is divided by the vehicle list price and simply multiplied by a factor of 100, so you can find the best offer. Because the lower the leasing factor, the better the offer in the end.
What factors do you have to consider when comparing offers?
When comparing their offers using the leasing factor, the following must be taken into account:
The comparison of leasing offers using the leasing factor is only effective if the comparison involves an identical vehicle. You should therefore not compare a Ford Fiesta to an Abarth 500 based on vehicle size alone.
There are also differences between a commercial lease and a private lease, because commercial leasing usually has a lower leasing factor.
The annual mileage and the contract term should also be the same when comparing.
If special payments are available, these should also be included.
Supplementary insurance or all-inclusive contracts etc. must be taken into account and calculated separately.
And premium manufacturers such as Mercedes, Porsche, Aston Martin, in principle, have a higher leasing factor compared to other brands because they are models with stable value.
The calculation of the leasing factor
To calculate the leasing factor, you only need the leasing rate, the gross list price of the car and the amount of the down payment or the contract term.
Then the rate is calculated by the gross list price times 100 to get the leasing factor of the vehicle.
This can be done much easier with your own online calculator.
If the result is available, then it depends on the evaluation of the factor.
It looks like this:
*) a factor smaller than 1,1 is good
*) a factor less than 0,9 is very good
*) a factor less than 0,7 is top
Therefore, the lower the factor, the better the leasing offer!
How to find the cheapest offer for your dream car
Thanks to this formula, you can now check and compare all applicable leasing offers at your leisure.
Let's take a look at an example:
The gross list price for your dream car is 29300 euros. For the first dealer, the monthly leasing rate is around 249 euros with a special payment of 1500 euros and a term of 24 months.
Now the monthly rate of 249 euros + 1500 euros is calculated over 24 months, this result is calculated by the gross price and finally x 100. The result is a leasing factor of 1,06 and therefore good!
The second dealer offers a monthly payment of 169 euros with a special payment of 2000 euros, also with a 24-month term.
With this leasing offer we come to a leasing factor of 0,86 which is a “very good” offer.
At the third dealer we have a monthly rate of 199 euros, no special payment and a term of 24 months.
With our invoice, we come to a leasing factor of 0,68 and thus receive a top offer from this dealer!
So you can always find the best offer, with this formula you can easily calculate the best leasing contract!
An easier decision when comparing leases
Many leasing providers already state the leasing factor in their offers. This enables you to quickly see the quality of an offer. In addition, you can assume that the lessor is very transparent to its customers and simply offers potential prospects a comparison with other providers.
If the leasing factor is not listed in the offer, you can use this formula to calculate it yourself. As already mentioned, you should always observe the requirements for the correct calculation, because only then can you use the leasing factor as an effective tool for a comparison. So you always find the best offer and the customer can choose the best leasing provider!