It sounds like a really tempting offer at first: 0% leasing. Many leasing providers advertise with this attractive promise and unique conditions. But what exactly is behind 0% leasing? Is it really free? Or is this term just an empty promise? In this blog, we explain to you what exactly 0% leasing means and whether it is worthwhile for you.
Is 0% leasing the same as 0% financing?
We are all probably familiar with 0% financing. This means that you get a loan or an installment loan where no interest has to be paid on the repayment. But does that also apply to 0% leasing? Basically yes, because with 0% leasing there is no interest on the financing or more precisely, you pay no interest on the list price of the car.
Zero interest, zero problems?
0% leasing means that you pay no more than the list price of the car. The list price is the price that the car manufacturer sets for the car and which is published in a list similar to a non-binding list. List, similar to a recommended retail price. At first, this sounds tempting and transparent. However, when you buy a new car from a dealer rarely it is with its list price, since dealers often offer discounts for certain conditions, such as cash payment.
Who offers 0% leasing?
But who can offer leasing at 0% interest? After all, leasing is basically a financing option, and as with financing through the bank, the bank earns on the interest. Therefore, 0% leasing offers are often found at leasing companies that report directly to the manufacturers and therefore have other options for refinancing. In the case of independent leasing companies that offer 0% leasing this can be offset by hidden costs. Often these 0% leasing offers serve the car manufacturers to increase sales or marketing of this model.
What are the differences to other leasing models?
But is the 0% leasing model really cheaper than other leasing models? That depends on the conditions. With kilometre leasing, it is agreed exactly how many kilometres may be driven during the contract period. If these are higher than agreed after expiry, additional costs are incurred. With residual value leasing, you pay for the loss in value of the car that occurs during the leasing period. This is determined in advance and offset against the actual depreciation at the end of the lease. Compared to 0% leasing, these two models can result in high additional payments at the end that were not included in the calculation at the beginning. However, the basis of calculation for 0% leasing is different from the list price for these models, so you should always go through all the options, as the other leasing models may be more worthwhile.
0% leasing is not uniform
Another problem with 0% leasing is that the term is not standardised. Every leasing provider has different conditions for 0% leasing. Under the term "0 leasing" some leasing providers even offer no down payment, but this does not mean that this leasing is also interest-free. It is therefore highly advisable to check the contract conditions carefully and compare them with other providers.
0% leasing sounds very attractive at first glance, but behind this offer lies an ingenious marketing strategy of leasing providers, which is not necessarily favourable for you. Therefore, you should not be fooled by these offers and check your alternatives. Check your alternatives. How about Carvolution? Here you get a new car on subscription, guaranteed all-inclusive and without empty promises.