Difference between operational, private and financial lease
Differences and advantages explained per lease form
There are major differences between operational, private and financial leases. With a financial lease you are the direct economic owner of the vehicle. Financial lease is therefore similar to buying or paying off. This is not the case with the other forms of leasing. With both operational lease and private lease you do not directly own a vehicle, but in fact you rent this vehicle for a longer period only.
What is the difference?
With operational lease (only for companies) and private lease (only for private individuals) you pay a fixed monthly amount for the use of a vehicle that is mainly new. The only additional costs are those for fuel, car wash, parking and any fines. These forms of leasing also have a maximum number of kilometers per year that you are allowed to drive. If you exceed that, the amount of the monthly installment will be higher.
With a financial lease , which is mainly used by companies, you are the direct economic owner of the vehicle. The monthly amount to be paid consists of principal and interest. The costs for maintenance and use are therefore not included. You can usually just trade in your old vehicle, make a possible down payment and agree on a final term. The term of the lease contract can be agreed upon in consultation. It doesn't matter how much you drive. View the chart below for the differences at a glance.
| Finance lease | operating lease | Private lease | |
|---|---|---|---|
| Direct economic owner | Yes | no | no |
| Owner at maturity | Yes | no | no |
| Monthly amount | Consists mainly of principal and interest | Is purely for car use | Is purely for car use |
| kilometers per year | Unlimited | Limited | Limited |
| Additional costs | Insurance, motor vehicle tax, maintenance and all running costs | All usage costs such as fuel, car wash, parking and fines | All usage costs such as fuel, car wash, parking and fines |
| Trade-in possible | Yes | no | no |
| Terminate the contract prematurely | Expedited redemption possible in many cases | Almost never without high costs (buyout payment) | Almost never without high costs (buyout payment) |
| Maintenance | To be carried out at your own discretion | Included in lease price | Included in lease price |
| Interest deductible | Only for companies | N/A | N/A |
| VAT refund | Only from purchase amount | Only from monthly amount | N/A |
| Investment deduction | Commercial vehicles only | no | no |
| Depreciation in accounting | Yes | no | no |