Leasing with partial amortization – Home loan

If you want to lease something, you have the choice of leasing whether you opt for leasing with partial or full amortization. At first glance, a lease with partial amortization is cheaper, but it also carries some risks, especially if certain conditions have been agreed.

The lease with a partial amortization is a finance lease, which means that a fixed monthly lease payment must be paid for the lease period over a period specified in the lease contract (the basic rental period).

Partial amortization means that the leasing installments cover the financing costs by the lessee, but not in full, but only in part. At the end of the term, the lessor’s acquisition costs are only partially offset (amortized).

This means that by paying off only a part, a residual value remains at the end for which certain regulations can be agreed and met. The advantage here is that since the acquisition costs do not have to be paid in full during the term (with or without leasing with a down payment), the monthly rate is of course lower and may even be lower than with financing, depending on the amount agreed Is residual value.

The disadvantage, however, is that a lease with partial amortization often passes the risk of the residual value on to the lessee, which is agreed in the leasing contract, i.e. if the residual value is higher, the lessee can share in the profit on a sale at this value If the rest is lower at the end of the leasing period, it must bear the difference between the actual residual value / sales price and the agreed residual value.

However, it is very rare that the residual value is exceeded, because, exaggeratedly speaking, a vehicle would almost have to be as new or as good as new – even minor damage can greatly reduce the residual value.

In the case of leasing with partial amortization, the right to tender is also quite common. The put option of stating that the leased property be purchased at the end of the term by the lessee must, when the lessor may not sell it. The right to tender is an evil trap since it applies only one-sided.

If, for example, the residual value is higher than agreed, the lessor can decide to get this higher residual value through a sale to the lessee – if it is lower, he must, see before, bear the difference between the actual residual value and the agreed residual value. But: Since the lessor can decide who to sell to, the lessor does not have the right that the lessor sells the property to him.

Advantages of leasing with partial amortization

Advantages of leasing with partial amortization

The great advantage of leasing with leasing with partial amortization is that the fact that the leased property does not have to be paid in full can result in a very low monthly leasing rate, especially with a down payment. If, for example, a vehicle is leased with a value of 50,000 USD and a residual value of 20,000 USD and a down payment of 5,000 USD, you only have to pay the amount of 25,000 with the leasing installments. With a term of 6 years (72 months), this would only be a leasing rate of approx. 350 USD per month.

Disadvantages of leasing with partial amortization

Disadvantages of leasing with partial amortization

The basic rental period is the first hurdle, because a lease cannot be canceled during the basic rental period, regardless of why. Only the lessor can terminate the contract, but if you provoke a termination, e.g. B. by simply not paying the leasing installments and thereby violating the contract, the lessor can enforce various penalties for the breach of the contract, which are usually far above what you would have had to pay for the leasing installments during the basic rental period.

There is also a transfer of risk in the case of a lease with partial amortization, which means that even if the owner of the leased property is the lessor, you have to take on all the risks yourself, e.g. B. for impairment, damage, theft or even destruction. Protecting yourself against this risk, except for a service lease, is also the responsibility of the lessee

Thus, with leasing, additional costs are always to be expected if you want to protect yourself against damage, destruction (total loss) or theft, e.g. B. ideally with fully comprehensive insurance – and this is not cheap, especially with expensive leasing goods.

In addition, certain conditions stipulated in the contract, such as the residual value or the right to tender, as well as other, see: Leasing contract overview, can represent a major financial disadvantage that can hardly be calculated at the beginning of the leasing. The cheap leasing with partial amortization is therefore bought with a high risk.

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