Credit and leasing are two viable alternatives for acquiring a vehicle. If credit is less known, it remains competitive. What are the respective advantages of each solution? Our comparison and our explanations.
Two different alternatives
As a reminder, the credit solution consists in borrowing money from a bank or a financial institution, and using the amount obtained for the purchase of the vehicle. The borrowed amount is then reimbursed by fixed monthly payments over a period ranging from 12 to 72 months and including interest. Leasing is not a loan, but rather a long-term rental. The driver then pays a monthly tax corresponding to the estimated depreciation of the property, plus leasing costs. At the end of the contract, it is possible to buy back the vehicle at the price of its residual value.
In order to illustrate the positive and negative points of each solution, .Best Bank offers you a comparative table of these two financing alternatives. Main advantages and disadvantages are thus to be discovered.
Leasing: advantages and disadvantages
Leasing remains the most widespread solution for the acquisition of a vehicle. Easy to obtain, it allows you to benefit from low monthly payments and can be taken out over a long period. However, it has certain disadvantages that are often overlooked by the public.
|More widespread It is very easy to obtain a leased vehicle from a long-term dealer Leasing can be concluded in the medium or long term, with the possibility of renewal at the end of the contract Low monthly payment The monthly cost is often very advantageous||Non-owner The property does not belong to the driver. Impossible to resell it for example No price negotiation Both when buying the vehicle and at the end of the contract: the leasing is sold as a non-negotiable product Casco insurance imposed The monthly premium is also often more expensive than for a fully owned vehicle Mileage limit A limit is sometimes imposed, with an increase in the event of overspending Early termination In the event of early termination of the contract, the customer pays fees|
Credit: the alternative not to ignore
While leasing is intrinsically linked to the vehicle acquired, credit allows a precise distinction to be made between the vehicle itself and the financing of the latter. If the monthly bill may turn out to be higher, the total interest remains advantageous, especially over a shorter period.
|The vehicle belongs to the driver Possibility of resale without any constraint Negotiable price The purchase price as of resale can be negotiated Insurance and mileage No restriction in terms of insurance (optional casco), no mileage limit imposed Early reimbursement In case of reimbursement of the loan earlier than expected, the client saves on the interest payable Tax deductions The interest on a loan can be deducted from the tax return||Sometimes high monthly payments In particular if the contract provides for a short-term reimbursement More restricted access Thus, for example, it is not possible to obtain a credit in the event of legal proceedings|
When buying or looking for a vehicle, it can be interesting to compare the credit and leasing offers in order to find the best solution according to your needs and situation. What is the monthly budget available? Are there plans to buy back the vehicle at the end of the contract? What are the insurance needs? Faced with all these questions, an advisor can help to provide individualized answers by proposing a comparison between the solutions, for example. In fact, the cost of each alternative depends on several factors, and above all it is not possible to simply compare the interest rates, the calculation of the cost being different. A good cost analysis will take into account all the factors, but also the situation of the vehicle taker.