At first glance, some of the LLD/LOA offers can seem very attractive, but as with most things, the prices and offers advertised are often not quite as good as they seem! It is highly recommended that you compare multiple LLD/LOA offers and speak to an advisor who can tailor an offer or offers that suit your unique circumstances.
As with any loan or lease agreement, there are a number of factors to consider when choosing the right deal for your circumstances and the best deal financially.
The main things to consider are:
The amount of the “Apport” – the deposit or lump sum. Some contracts will be “sans apport”, meaning no lump sum payment is required; other contracts call this the “1er Loyer” (ie the first rent). All contracts should be available “without apport” and this is often the best deal; However, if you pay an apport upfront, you can lower the monthly fees.
Note that this is not a security deposit – you do not get it back at the end of the contract and if you want to sign another contract at the end of the lease you will have to pay back the share.
The higher the apport, the lower the monthly fees – but there is often a sweet spot from which you pay significantly more overall. So it is important to also look at…
The total cost. How much do you pay for the car over the entire contract? You can calculate this with the following equation:
Apport x (monthly fee x contract duration in months)
Example: A contract with an Apport or 1er Loyer of €4,500 and a monthly fee of €430 over three years would cost €4,500 + (€430 x 36) or €19,980.
The Prix d’Achat or Purchase Price. With an LOA, you also want to know the final purchase price if you’re looking to buy. You would then add this to the total cost of the lease to come up with the total cost of the car. For example, if the contract above was quoted at a final purchase price of €14,700, you would add this to the total leasing cost of €19,980 – the total cost of the car if you decide to buy it then comes to €34,680. (You can then compare this to the selling price of the car in question to calculate how much extra you would pay overall for financing). The term of the lease. When you see very low monthly fees advertised, it’s often a number based on a very long lease – e.g. B. 72 months (six years!). In general, you don’t want to go beyond three years or 36 months, and most contracts last between 24 and 36 months, so keep that in mind. The monthly payment amounts. This is probably the first thing most people will look at, but we’ve put it last for a reason! As you can see above, the amount you’re willing to pay monthly is determined by the amount of the apport and the length of the lease, so it’s important to consider all three.
The bottom line is that if your desired monthly fee means paying an above-average amount and committing to a six-year contract, it might be better to go for a cheaper car that better suits your budget. Note that a good sales adviser should point this out – while they would understandably want to push you towards the more expensive options, most reputable repairers have no interest in locking you into what is obviously a terrible deal!
