How to compare leasing offers?

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Sometimes it is the case that the seemingly best offer turns out to be the weakest. Paying attention to one or two aspects of it is a little too little to assess how beneficial it is. When analysing leasing offers, several factors are important. It is worth bearing this in mind. They shall be presented in a transparent manner. You only need to remember what aspects of your interest, and it will be easy to judge which of them are actually more attractive than others.

Total cost of leasing

Total costs are easy to compare. These are certain amounts and you can see immediately which is higher and which is lower. However, there is a little detail that needs to be taken into account. This cost usually includes the redemption amount. If it is not included in any leasing offer, it distorts the meaning of this parameter. It is only necessary to add this amount in order to be able to compare the total cost that will be incurred in such a company to others. Another significant amount may be the handling fee. When comparing different values, you have to consider whether it is in the total cost. It can also be summed up with the initial payment. Attention must be paid to such trinkets to ensure that adequate amounts are compared with each other. This is necessary to compare the costs and thus the profitability of the offers.

Lease installment (lease rent) - exact quantity

Another parameter that is important in the assessment of financial viability is the number of installments. You need to know exactly how many of them. For a two-year contract it can be 23 or 24 instalments. For three years it is 35 or 36 installments. With this in mind, it is possible to compare the total cost and the amount of the installment correctly. You will see in which offer you have better conditions for yourself. There is one more thing that needs to be taken into account. If there are more instalments, i.e. 24 or 36, it may mean that the contract ends soon, but the insurance for the next year will have to be paid.

Interest rate of the leasing offer

When you use the leasing offer you have to deal with interest rates. It is usually variable, less often constant. If it is variable, it is based on 1M or 3M WIBOR. The value of the adopted ratio should be reflected in the lease terms and should not differ significantly from what it is at any given moment. If foreign currencies are involved, EURIBOR or LIBOR indicators are used. Information to identify exactly what this is with interest rates should be included in offers. If there is no data on the level of the adopted indicator, it is necessary to inquire about it.

Insurance of the leased asset - costs and conditions

Insurance is an additional cost that you will have to bear. The differences that will be associated with the fact that you will take something to lease in one company or another can be considerable. It is always necessary to find out about these costs, because, as well as other costs, they will have an impact on how much it is worth to take advantage of the offer. More expensive insurance may exclude the leasing offer, which at first was considered the most advantageous. It may also be possible to search for an insurance offer on your own, not to take advantage of a package that a leasing company has prepared together with one of the insurance companies. However, such a possibility may involve additional costs. Consent to self-insurance will then be linked to the collection of an annual fee. It may be beneficial to bear it, but the easiest way is to choose an offer where the total costs are attractive. For a precise comparison of different offers it is still necessary to find out about the insurance costs in the following years of the contract and how they will be calculated.

GAP insurance - costs

Leasing companies offer the possibility to take out GAP insurance, i.e. insurance against a drop in the value of a vehicle. It is a protection of financial loss. The cost is added to the installment. So there is another indicator to compare. As a rule, the best, i.e. the best rated leasing companies offer such insurance at a lower cost. Monthly it should not be more than 0.06 percent of the value of the leased asset.

Differences between leasing offers

It may seem to be all very complicated, because even the total cost may not mean the same. There are also others, such as insurance or the amount of the purchase. The next one is own payment. However, it is not so much complicated as it requires precision in comparison. You have to analyze everything meticulously so as not to skip any detail that may modify the profitability of the offer. A great help in assessing where it is more advantageous is a calculator for comparing leasing offers. You can calculate the real cost of the offer, which is what is most important when comparing them with each other.

Conversion of lease instalments

There is one more parameter that is important for those who decide to lease in a foreign currency. This is the conversion of instalments. The difference between the purchase and sale rates of a foreign currency (spread) will be significant. It may be insignificant, or it may be quite large. Each bank has its own exchange rate table. For a person deciding on such an agreement it is important which bank the table will be the basis for settlements. What value has been determined for the leased asset in a foreign currency, it is also important, because this amount will be used as a basis. And another important thing for people settling in a foreign currency. If your own deposit is already indexed to the spread, you will need to deposit a little more.