The purchase of a new or used vehicle is always an important decision in a driver's life. Between high cost new car or used car at lower price but more risky, it is not always easy to choose. In order to enjoy an ideal compromise, more and more people are being tempted by leasing at Elite Auto, for example. How does it work? Which formula to choose? Discover our advice.
LPC vs LTL: which formula to choose?
Leasing is an increasingly popular method of financing new vehicles in France, as this article highlights. In 2017, three out of every four financings used this principle. Today, it is possible to choose between two types of leasing contract: leasing purchase contract (LPC) and long-term lease (LTL).
LPC and its advantages
Leasing with a purchase option is the most common form of leasing among private individuals. It consists of leasing a new vehicle for a predefined period of time (usually three years) and for a predetermined number of annual kilometers. At the end of the contract, the vehicle can be purchased by its user. The purchase price is defined at the signing of the contract. However, the purchase is not an obligation and the driver may choose to sign a new leasing contract. This solution has many advantages:
- Possibility to change the vehicle on a regular basis, taking advantage of the latest models,
- The maintenance of the vehicle is included in the contract (sometimes the driver is responsible for the tires or brake pads),
- Adjustment of the monthly payments according to the chosen mileage, the contribution (or trade-in of a vehicle), the model and the duration of the contract.
The LPC is therefore a great opportunity to be able to drive recent vehicles and to change them regularly. On the downside: the monthly payments can be a little higher than those of a car LPCn, nevertheless the range of services included in the contract is interesting and allows to limit expenses on other aspects.
The LTL and its advantages
Long-term rental is a leasing system more intended for professionals. Its principle is the same as the LPC, with the difference that there is no purchase option in the contract. However, if the driver / company, wishes to acquire the vehicle at the end of the LTC, he can make the request. In this case, the price of the car will be calculated in relation to the current market.
How to choose your leasing?
You are considering leasing but you are a little lost? Don't panic, here are some elements you need to analyze to find the right contract.
The variety of models offered
To guarantee you as many choices as possible, opt for a leasing service that offers a fairly wide range of vehicles. Indeed, depending on your situation (city, provincial, single, with children...) you will not have the same needs. You must therefore be able to choose between several types of vehicles to find the one that suits you.
Services included in the contract
Leasing is an interesting contract because it includes many services, especially concerning the maintenance of the vehicle. However, some providers do not include all the services. Therefore, remember to inquire to know what you will have to pay for.
The cost of leasing
To calculate the amount of your lease, different parameters are taken into account such as :
- The duration of the contract,
- The number of kilometers,
- The car model,
- The constitution of a contribution or the repossession of a vehicle...
To modulate your monthly payment, you will have to play on these different elements. Think about which options are essential in the vehicle, and which ones you don't necessarily need. Take stock of your finances to possibly make a contribution or take back your vehicle to build it up.
The variation in mileage
When you draw up your contract, you must choose the mileage you will drive throughout the duration of your contract. For example, you can sign up for 60,000km over three years, or about 20,000km per year. To anticipate this, take into account your regular trips (work, activities...) and more punctual trips (vacations...).
To choose the right provider, be sure to check the flexibility in terms of mileage and the costs charged for overrunning. Indeed, if you exceed the planned quota, you will pay a fee for each additional kilometer.