Financing vs. Leasing in Germany
Leasing dominates new cars in Germany, and finance dominates used. The right answer depends on how long you keep cars and whether you want the residual value risk.
The main options
| Product | How it works | You end up with |
|---|---|---|
| Barkauf | Pay cash | The car, and no interest |
| Klassische Finanzierung | Equal instalments over 12–84 months | The car |
| Ballonfinanzierung | Low instalments, large final payment | A choice: pay, refinance, or return |
| 3-Wege-Finanzierung | Balloon with a guaranteed buy-back | A choice at the end |
| Kilometerleasing | Monthly rate for an agreed annual mileage | Nothing — you hand it back |
| Restwertleasing | Rate based on an estimated residual | Nothing, plus risk if the residual is missed |
Leasing: read the mileage clause first
Kilometerleasing is the safer form. You agree an annual mileage, and over-mileage is charged at a stated rate (typically 5–15 cents per km), with a partial refund for under-use. Restwertleasing pushes the residual value risk onto you — if the market moves against the car, you pay the difference at the end. Avoid it unless you genuinely understand the exposure.
Balloon finance: the honest version
A €30,000 car over 48 months might show €280 a month against a €14,000 balloon. The monthly figure is attractive because you are barely repaying capital. If you cannot pay or refinance the balloon, you are refinancing at a worse rate, or handing the car back and having paid €13,000 for four years of use.
What to compare
- Effektiver Jahreszins (APR) — not the nominal rate. Under 4% is competitive in 2026; dealer 0% offers usually mean a smaller discount.
- Total cost of credit — the number they never lead with. Add up every payment plus the balloon.
- Anzahlung — a bigger deposit lowers interest paid, but is dead money if the car is written off
- Schlussrate and what happens if you refuse it
- Whether the bank holds Zulassungsbescheinigung Teil II (it usually does)
The dull answer that is usually right
For a used car, a bank Ratenkredit from your own bank or an online lender is often cheaper than dealer finance, and gives you cash-buyer leverage on price. Get the loan approved first, then negotiate as if paying cash.