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Private leasing or car loan? | Auto Credit Broker


In the middle of the trade fair conditions on the purchase of a car, buyers are wondering how to finance it. In recent months, private leasing or car leasing for individuals has developed. Let’s see if this solution is better than auto credit? More commentary at

Compare private leasing with the loan of a car

Compare private leasing with the loan of a car

If you do not have enough financial resources to buy a new car in cash, the car loan solution comes to mind. Families who are not immediately comfortable in the world of car leasing believe that private leasing is synonymous with borrowing money for a car. Nothing is more wrong: there are essential differences between renting a particular car and borrowing money for a car.

When renting a car, at the end of the lease, you do not own the car yet. You will have the first choice to pick up the car but you can also choose to rent a new car. This gives you the opportunity to drive a new car after the expiration of each contract.

Through a car loan, a portion of the principal and interest is paid monthly for the car, but at the end of the credit agreement, the car is 100% owned and its residual value is calculated.

The extent to which renting a car as an individual is more attractive than buying a car (with or without a car loan) depends on many factors that you do not always have in your hands:

  • the amount of the maintenance costs,
  • the number of kilometers you will travel,
  • the life of the car,

What is a private car leasing?

What is a private car leasing?

What are the advantages of renting a car privately through a car manufacturer or a leasing company? And are there differences between borrowing money to buy a car or renting a private car? What is a private lease? Through a private leasing, we receive for a period agreed a car for which we pay a fixed monthly amount. Most car rental packages are designed for 2 or 4 years. The terms and conditions of renting a private car vary from one leasing company to another. In most leasing companies, in addition to the use of the car, you also get coverage for additional costs such as:

  • insurance
  • legal assistance,
  • the circulation tax,
  • maintenance,
  • the tyres,
  • roadside assistance and / or a replacement car.

Automobile leasing is not new. In the business world, the operational leasing formula has existed for years in the form of “leasing a company car”. The employee received a car as an additional part of his salary and the employer undertook to cover all the additional costs mentioned above. For an employee, a company car was an advantage since only a benefit in kind was taken into account as salary.

For its part, the employer was able to deduct (partially) the cost price of the leasing as operating expenses and, after comparison, granted a form of remuneration less imposed by the tax authorities and the social legislator. Due to the boom in private car rental, these benefits are now also available to families whose employer does not offer a company car.

Advantages and disadvantages of private leasing

Advantages and disadvantages of private leasing

The advantages of renting a car through a leasing contract:

1. Predictable monthly amount.

Thanks to a private car leasing formula you know in advance how much you have to pay for the car every month. In other words, drivers do not have to worry about the number of car maintenance cycles, possible scratches due to vandalism, a replacement car, etc. Any costs, with the exception of the cost of fuel, are included in the leasing price.

2. No deposit or balance to pay.

Renting a private car does not require a deposit or a balance. After all, the ownership of the car never passes to the driver of the car. When, in the case of a car loan, the lender’s property right passes to the borrower after the monthly repayments have been made, the car manufacturer or the leasing company retains the private ownership of the vehicle for the entire period. duration of the rental of the vehicle.


1. No property rights on the vehicle:

Renting a car privately never becomes the owner of the car. The rental car remains the property of the car manufacturer or the leasing company for the duration of the lease. While with a car loan, after reimbursement of all periodic payments, we could sell the car on the second-hand market, we have no tangible possession after the end of the rental of the private car.

2. Long-term financial commitment:

A private car rental contract commits you for the duration of the contract. It will not be possible to cancel the rental agreement, except for a high cancellation fee (up to 50% of the remaining monthly amounts), if you are tired of the rental car or if you wants to change car because of different family needs. Where, if one would have bought the car oneself, whether or not through a car loan, one could decide at any time to sell the car. Carry out the necessary simulations before signing the lease of a particular car. Try to maintain sufficient financial reserves to pay the monthly rental price if, for example, you are forced to change jobs. Tip: Some leasing companies offer supplementary insurance to cover the unpleasant circumstances that affect financial possibilities, such as forced dismissal, divorce or the death of the partner.

3. The estimate determines the cost price:

As a leaseholder of a particular car, you will have to indicate at the beginning of the lease the number of kilometers traveled each year. The estimated kilometers are used as an indication to calculate the monthly rental price. As the number of kilometers traveled on an annual basis increases, the residual value of the rental of a particular car will decrease and, as a result, the monthly rental price will increase.

If you buy a new car, contact us to study financing and insurance solutions.