Car: the advantages of leasing with an option to buy or LOA

Are you going to buy a new car? In this case, you may have considered several options. You may have considered buying a used car. But if you want a new car, you have several options for payment. In this article, we will analyze the lease with option to buy or LOA, which is becoming more and more popular.

Buying a new car

If some people opt for used cars, it is true that a new car offers all the guarantees. You will leave the car dealership with a reliable car in perfect condition. You can then drive with it for tens of thousands of kilometers without having to do anything. That’s a lot of peace of mind compared to a used car, which may need to be repaired more quickly. A new car also has no hidden liabilities, unlike a car that has already been used. If you prefer new, then you have several options for payment.

Different options for the payment of your vehicle

If you buy a new car, its price will necessarily be higher than if you take the same model second hand. However, if you have enough money saved, you can pay cash for your car. This way, you don’t need credit or financing. This option allows you to save money compared to a credit, since you don’t pay the interest on the credit. However, not everyone has the ability to come up with a large sum of money right away to buy a car. In this context, you can either go for a classic car loan. For example, you can ask several banks to compare interest rates and loan terms. In parallel, another possibility is the LOA, i.e. the lease with purchase option.

Focus on the LOA

The LOA is more and more popular. In principle, you pay a monthly instalment defined at the time of purchase for a period also defined. Typically, this ranges from 24 to 60 months. Over this period, you will also commit to a number of kilometers to be covered. Let’s say 35,000 kilometers over 36 months if you don’t drive much. For precision, the LOA can be carried out without contribution. To be precise, the monthly payments are calculated on a part of the value of the car and not on the totality of it. In our example, at the end of the 36 months, you will have 3 options. First, you can buy the car by paying the rest of the car. The second option is to stop the levies, return the car and possibly get a new one. And the third option is to find a buyer for your car, other than the dealer.

In the end, the LOA has many advantages. First of all, you get a new car. In addition, you can enjoy reasonable monthly payments, around 100 euros for some models. Finally, for the duration of the contract, you don’t have to plan anything since maintenance is usually included. So don’t hesitate to compare with a classic credit.

In any case, make sure you know all the conditions before you decide and be sure you can handle the load before you commit.

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