More and more people are tending not to buy their vehicle at all, but to return it after an agreed term. If you are interested in this type of "car rental", you can choose between 3-way financing or classic leasing. We have summarized for you what the differences are and when what makes sense.
In times of the environmental bonus, there is an increased demand for new cars, especially for electric cars. The majority of new car buyers are unable to pay for their vehicle in full cash, which is why the demand for car financing is also rising continuously.
Here you will find our top models for new car leasing:
| Model | Offers from | |
| Fiat 500 Electric | 229 € / month | Compare leasing offers |
| Hyundai Ioniq 5 | 316 € / month | Compare leasing offers |
| Cupra Leon | 283 € / month | Compare leasing offers |
| Ford Kuga | 290 € / month | Compare leasing offers |
| Skoda Fabia | 219 € / month | Compare leasing offers |
But not everyone wants to keep the car after the end of the term. Often, both private and commercial leasing customers return their cars at the end of the term. While a leasing contract is usually drawn up, there is also another option where a return is an option: 3-way financing.
3-way financing or leasing: advantages and disadvantages
| 3-way financing |
Leasing |
| ✅ Low monthly installments | ✅ Tax deductible (business customers) |
| ✅ Very flexible | ✅ Planning |
| ✅ No fixed mileage |
✅ No increased final installment necessary |
| ✅ Return, purchase or follow-up financing |
✅ Return is possible |
| ✖ Overall more expensive than leasing |
✖ Additional costs may apply upon return |
| ✖ High interest costs | |
| ✖ Tied to contract term |
Which variant is the cheaper?
Depending on which type of car purchase you prioritize, both 3-way financing – also known as Vario financing – and leasing sound good. The main advantage, the return of the vehicle, is given in both cases. So what should you choose? We have a sample calculation for you. The purchase of a VW Golf was assumed here:
| 3-way financing |
Leasing | |
| Vehicle price | 20,860 euros | 20,860 euros |
| Contract | 36 months (incl. final installment) |
36 months |
| effect. Annual interest rate | 1,99 % | 1,17 % |
| Deposit | 4,172 euros | 4,172 euros |
| monthly rate | 209,09 Euro | 335,11 Euro |
| Final instalment or residual value |
9,956.48 euros | 8,010.24 Euro |
| Total | EUR 17,483.72 | EUR 12,064.02 |
Don't be blinded by the monthly lower installments of 3-way financing, because it only seems that way at first glance. The agreed final instalment is the reason why a relatively small monthly amount has to be paid during the term. However, you must also be able to afford the final instalment at the end and what most people don't know: During the entire term, you pay the interest on the entire amount, including the final instalment. Overall, this leads to a relatively high interest burden. Another type of financing is 0% financing. In this case, you pay the same instalments without interest, but in the end you do not have the choice of returning the car, but have to pay the final instalment. If push comes to shove, you could also sell your financed car.
In this respect, leasing is the cheaper option. The common leasing variants are mileage leasing, residual value leasing and zero leasing. however, the vehicle definitely does not belong to you after the term. The 3-way financing at least leaves you with the option of buying the car. This means that the additional expenditure has at least an equivalent value. For both types, the bank or dealer will make a credit bureau query beforehand. A good credit rating is therefore a prerequisite. Car financing without SCHUFA or leasing without SCHUFA is hardly possible in Germany, so be careful with such offers so as not to fall for fraudsters. Of course, you are free to buy a lease return
3-way financing – the better leasing?
If you want to decide between leasing and 3-way financing, you definitely have in the back of your mind that you want to return the vehicle in the end. What are the exact differences and which variant is the better?
Leasing
If you lease a car, you only pay for what you use, because the vehicle is only in a rental relationship with the lessee. He does not acquire ownership of the vehicle and returns it to the lessor after the agreed term. A down payment is agreed individually and reduces the monthly leasing rate. This rate is therefore to be regarded as a usage fee for an agreed time. Therefore, it is usually lower than a loan installment, with which you acquire ownership of the vehicle. A leasing contract can also be extended – as long as the car provided continues to appeal to you.
There is the possibility to choose between different types of leasing, so that you can tailor the vehicle exactly to your individual life circumstances. You can consider leasing if:
- You can deduct the leasing instalments from your taxes (mostly business customers)
- low monthly costs are desired
- you often want to drive a new car
- you don't want to worry about the "disposal" of the old vehicle
But as with everything, the risks must also be considered when leasing:
- often strict valuation at the end of the term (additional payments possible)
- Insurance and workshop are usually mandatory
- Early termination of the leasing contract very difficult
- Don't fall into the leasing trap
3-way financing
The initial goal of 3-way financing is to acquire ownership of the financed vehicle at the end of the term. Nevertheless, this type of financing is very similar to leasing in a way. At the end of the term, you can choose between three different options: either you buy the vehicle at the agreed final installment, you refinance the residual value or you return the car to the dealer.
However, the latter is only possible in the form of a prior agreement. So if you want to keep this option open, you must make this agreement with the retailer as a precaution at the time of purchase.
3-way financing can therefore be seen as an intermediate stage between classic car loan and leasing. At the time of purchase, the expected residual value of the vehicle is already determined, which is deducted from the purchase price. The buyer repays the difference, i.e. the expected loss of value, during the term, but pays the interest on the entire purchase price. The advantages of this type of financing are:
- low monthly installments (since only part of the vehicle is financed for the time being, so to speak)
- High flexibility
But there are also disadvantages:
- early repayment of the loan amount not so easy
- High interest costs
- only the residual value counts when returning
Driving a new car
Why do you want to return your vehicle after three or four years? It can't be due to age and with an average driving profile, the mileage of the car is not yet high either. Repairs should not yet be necessary, only the first general inspection and a small customer service are necessary at this age. Actually, no reason to return the car - or does it?
We think that any repairs and inspections that may be necessary can be a reason, but are probably not decisive for most. A much greater influence is the living situation of the people, which nowadays can no longer be planned over a longer period of time. Three years ago, a small car was still completely sufficient, but it may be that two children and a dog now complete the family. Suddenly, a car with a lot of storage space is needed. There is no way around selling and you have to start looking for a suitable family car. Picking out documents for the sale, taking suitable pictures for the car sale – this is time-consuming.
You can save yourself this stress if you know that there is the possibility of return after the end of the term. It is this flexibility that counts today. In addition, you have the opportunity to drive a new car on a regular basis. In addition, if you currently have very little capital at your disposal, car financing without a down payment may be the right option.
source : 3-Way Financing or Leasing: Which Is Right for You? | carwow.de
