Leasing without down payment - the right choice?

Are you currently looking for a new car and considering whether leasing is right for you? Are you still unsure whether you want to make a down payment or not? Then you've come to the right place! In this blog article, we take a detailed look at leasing without a down payment: what it means, how it works and, above all, what advantages and disadvantages it has.

In addition, we compare leasing with and without a down payment and shed light on how the choice affects your costs.

What exactly does leasing mean?

In principle, leasing is a long-term rental of a vehicle. In contrast to buying a car, you do not acquire ownership rights to the car, but pay for its use over a fixed period of time, often between two and four years.

Additionally, a fixed number of kilometres per year is specified before the contract is concluded. If you exceed this, you will have to pay for it at the end of the lease. This is known as excess kilometres.

Once the contract period has expired, you must finally return the vehicle, unless the contract explicitly includes a right to purchase. In this case, you can also decide to buy the car and pay the residual value specified in the contract.

You can find more information about leasing here.

Leasing comparison: Does a down payment suit me?

When leasing, a distinction is made between the variant with or without a down payment. The difference is as follows:

Leasing with a down payment

If you lease with a down payment, you make a payment at the start of the lease. The down payment is usually set as a percentage of the vehicle value and has a direct influence on the monthly instalments: The higher the down payment, the lower the monthly instalments.

Leasing without down payment

Leasing without a down payment means that no down payment is made at the beginning of the contract. Instead, the costs are spread over the entire duration of the contract, resulting in higher monthly instalments.

Overview: Advantages and disadvantages of leasing without a down payment

Before you decide to lease without a down payment, here is a compact summary of the most important advantages and disadvantages.

Advantages of leasing without a down payment:

• No tied-up capital: The biggest advantage of the option without a down payment is that no large sum is due at the beginning of the leasing contract. This protects your liquidity.
• Opportunity costs: Since you are not making a down payment, the capital saved is available to you elsewhere. For example, you could opt to invest the money or use it for other projects.

Disadvantages of leasing without down payment:

• Higher monthly costs: As the total leasing costs are allocated to the monthly instalments, these are higher compared to leasing with a down payment. This can lead to high costs over the entire contract duration.
• Higher interest rate: As you are not making a down payment out of your own capital, the amount to be financed with your leasing bank is higher than with a down payment. Since, except for 0% leasing, interest is charged on the financed amount, the interest rate is correspondingly higher for you overall.

Total costs - What additional costs are incurred?

In addition to the differences between leasing with and without a down payment, it is also important to consider the total costs over the leasing duration. In addition to the leasing instalment, there are other costs for the car.

These include, for example, fully comprehensive insurance, registration & taxes, tyres and service & maintenance. The total cost calculation is therefore much more complex, as the costs are spread separately over the year. This is precisely where the car subscription comes in: all costs are reflected in a transparent, clearly calculable monthly instalment.

Car subscription: Flexible alternative to leasing

While leasing is one of many interesting options for driving a new car, a car subscription offers an even more flexible and often more financially attractive alternative. With Carvolution, you can choose whether you want to subscribe to your dream car with or without a down payment, depending on your personal preferences.

As with leasing, the option with a down payment means lower overall costs for you, as the interest burden for Carvolution is reduced.

However, an additional advantage of the car subscription over traditional leasing is that additional costs such as insurance, registration and taxes, tyre changes as well as service and maintenance are incurred separately with leasing. With the Carvolution car subscription, these are already included in the monthly instalment. This gives you full cost transparency and planning security with no hidden fees.

You can also easilycompare the cost of a car subscription with leasing in our total cost comparison. Simply configure your subscription for any car, and we will send you a corresponding cost comparison. Have a look at our large selection of cars or receive a non-binding advice from our experts.