Is it worth buying a car in leasing?

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As an alternative to car loans, leasing is becoming more and more popular and accessible to interested individuals. However, it is important to consider in which situations it is profitable and how to take advantage of the offer?

Consumer leasing became popular at the beginning of July, when the deregulatory law came into force, which changed numerous formalities that had so far reduced formalities and removed some of the administrative barriers. Thanks to it, consumer leasing is becoming an attractive and increasingly popular alternative to buying a cash car or car loan. What's more, these solutions give consumers the chance to drive younger, newer cars.

To begin with, it is worth answering the question of what leasing actually is. To put it simply, it is a form of lease. A person who leases a car does not become its owner, but only a user, paying a monthly instalment in return. We do not receive the right to purchase a vehicle until after the expiry of the contract. This method is much more attractive in comparison to credit, due to, for example, greater availability of this form of financing. What's more, when you stop paying, the car is simply taken away and there are no other consequences. This makes it easier to purchase a new or used vehicle if you have problems documenting your revenue. This is the case, for example, for contract-holders or freelancers.

At present, consumer leasing offers are not yet so extensive, but after the summer holidays the most important companies have announced the introduction of such offers. Therefore, it is best to refrain until then from choosing the right offer for you.

What exactly have the changes in the law taken place?

The possibility for private individuals to lease vehicles has existed for a long time, but the rules could have been interpreted in a divergent way, resulting in reluctance on the part of companies offering this type of sale. Until recently, this form of financing accounted for about 1 per cent of all cars leased, while in Western Europe it reached even 30 per cent.

The disputed issues are regulated in the new act, thanks to which the attractiveness of the offered products has been significantly improved. The aim is not only to encourage consumers to use this form of financing, but also to encourage new entrepreneurs to use it.

The new regulations do not specify the minimum duration of the contract, which was the case earlier. There was also a possibility to transfer the leased property to another natural person at rates lower than market rates. Until now, this has often been considered by the treasury as a deliberate understatement of income.

The biggest advantage of consumer leasing is high flexibility in setting installments. The rule is: the smaller the monthly installment, the higher the percentage of the value of the car will have to be paid after the expiration of the contract. This is especially true if we do not plan to buy the car at the end of the lease.

Leasing companies can offer a much more attractive car purchase price thanks to negotiated discounts. This type of financing is also much easier to access than a loan, so that the specific requirements of the banks do not need to be met. However, consumer leasing and bank credit generate very similar costs for the consumer.

However, this solution is not without drawbacks. First of all, it should be remembered that it is not possible to lease older cars. After the end of the contract usually the age of the car cannot exceed 8 years. The decision to buy a car earlier results in additional payments, and in the event of stopping paying the lease installments, we lose both the car and our own payments.