There are very different solutions for financing a car purchase. Classic cash payments are becoming increasingly rare, especially for high-quality automobiles, since buyers do not want to tie up a large amount of capital at once. That is why the world of car financing is almost as diverse as the world of the automobile itself.
Car loans with a final installment – classic leasing
Classic leasing is often chosen for car financing. This means that in contrast to a “normal” bank loan, it is not the total value of the purchase that is financed, but only a percentage of it. The down payment when buying a car is often 30-40% of the list price, so that the loan amount is no longer quite as high. The repayment of the outstanding amount is essentially carried out in two different ways: On the one hand, the monthly leasing rate reduces the remaining amount. On the other hand, the monthly installment looks comparatively cheap, because leasing as a variant of car loans with a final installment does not pay off to a residual value of 0. After 24, 36 or 48 months, a residual value often remains up to the five-digit amount.
This only has to be repaid if the car continues to be used and becomes the property of the previous lessee. This remaining residual value is called the closing rate. Instead of this final installment, the lessee can also return the vehicle. In this case, there is only a final invoice in which, for example, kilometers traveled are billed or impairments in car loans that have not been repaired have to be compensated for at the final rate.
Therefore, the large advertised monthly rate is deceptive
This is also the reason why many car companies advertise on posters and advertising slips with comparatively cheap, striking monthly rates. Because the monthly charge arises during the term of the leasing contract and is supplemented for car loans with a final installment by the two large payments at the beginning and at the end. If you consider this, however, then you can make a fair comparison calculation and often auto loans with a final installment are really the best of the possible alternatives.