For most companies, leasing is the standard way to finance a company car. Instead of buying a vehicle, the company pays a monthly rate and returns the car after two to four years. Companies can choose between two basic models, closed-end leasing and open-end leasing, which differ mainly in who carries the risk of the car losing value. Both models can also be extended with services to form full-service leasing. Which combination fits depends on mileage, the scope of service required, and the leasing contract itself. Our comparison of car subscriptions and leasing shows how leasing, buying, and car subscriptions differ in principle.
With closed-end leasing (Kilometerleasing in German, known as contract hire in the UK), the company and the leasing company agree on the term and total mileage at the start of the contract, for example 36 months and 90,000 kilometres. The leasing company calculates the rate from this. At the end, all that matters is whether the agreed mileage was kept to. Excess kilometres are charged, and unused kilometres are refunded depending on the contract. The price per kilometre is set in the contract, and many contracts also include a tolerance band. What the vehicle is still worth on return is irrelevant to the company, because the leasing company carries this residual value risk.
With open-end leasing (Restwertleasing in German, broadly comparable to a finance lease with a balloon payment in the UK), the leasing company calculates at the start what the vehicle is likely to be worth at the end of the contract. The rate is based on the difference between the purchase price and this calculated residual value. If the actual sale proceeds at the end are lower, the company pays the difference. A high residual value therefore lowers the rate but increases the risk of an additional payment.
For most fleets, closed-end leasing is the more robust choice, because costs can be planned reliably over the entire term. This does, however, require a realistic usage profile for each vehicle, since mileage set too low makes the rate cheap and the final bill expensive. Good contracts allow mileage to be adjusted during the term.
Open-end leasing can pay off if a company knows the used car market well, for example through its own remarketing experience, and is prepared to absorb fluctuations in sale proceeds. Many fleets, however, lack the market data for this.
Term and mileage influence the rate more than any discount. Leasing terms of 24 to 48 months are common, with 36 months the most usual. Longer terms lower the monthly rate but tie the company to a vehicle for longer, and its technology ages quickly, especially with electric cars. For mileage, it pays to look at real data instead of estimates. Analyses of fuel and charging cards, logbooks, or telematics can help show how far a vehicle in a particular role actually travels.
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Full-service leasing adds services to closed-end or open-end leasing that fleet management would otherwise organise itself. Typical components are maintenance and inspections, wear parts, tyres including changes and storage, statutory roadworthiness and emissions inspections, vehicle tax, insurance and claims management, breakdown and replacement car service, GAP insurance covering the gap between replacement value and the outstanding balance in the event of total loss or theft, and fuel and charging cards.
What "included" means is defined by the contract alone. Whether AdBlue, software updates, or certain wear parts are covered, for example, should be set out in a service catalogue, otherwise disputes arise later. Modular contracts in which components can be chosen differently for each vehicle class make sense.
An honest comparison should show whether full service pays off. The higher rate is weighed against the internal working time saved on garage appointments, tyre changes, and claims. The larger the fleet, the more likely it is that bundling everything with one service provider pays off.
Leasing offers can only be compared if term, mileage, and service components are identical. A low rate without service is not cheaper than a higher full-service rate if maintenance, tyres, and insurance are paid for separately later. The so-called leasing factor serves as a quick guide: it sets the monthly rate in relation to the gross list price and makes pure financing offers comparable. However, this factor says nothing about the service components.
The total cost over the term (total cost of ownership) is more meaningful. According to the Ayvens Car Cost Index 2026, a leased company car in Germany costs an average of €906 per month, all costs included, and the leasing rate is only part of this. For the company, leasing rates can usually be treated as operating expenses.
With electric company cars, residual values are harder to predict than with combustion engine cars, because the used market is still young and the condition of the battery largely determines resale value. For EVs, this makes closed-end leasing, where the leasing company carries this risk, even more attractive. In addition, maintenance items typical of combustion engines such as oil changes and wear fall away, while fleets have to deal with high-voltage inspections and software updates instead.
Then there is charging. For charging on the road, charging cards that work in as many networks as possible at predictable prices are a good choice for company car drivers. Our charging card comparison shows what matters. If company car drivers charge at home and pay for the electricity themselves, the employer can also reimburse the costs tax-free under Section 3 No. 50 of the German Income Tax Act (EStG), provided the amount charged is documented.
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Get infoLeasing companies differ less in the monthly rate than in everything that comes after it. Fleet managers can use the following criteria to assess leasing providers and find the right model.
Manufacturers' own leasing companies or banks, known as captives, often offer good terms for their own brand. Brand-independent providers keep competition open when it comes to choosing vehicles, which can be the more valuable lever for most fleets, since it prevents a single carmaker from dictating the vehicle strategy.
Sometimes a mix makes sense. A brand-independent framework agreement can be supplemented with attractive captive terms for individual models. What matters is that control stays in one place.
Every additional component that is not in the leasing contract usually creates more work for fleet managers, which can be avoided if the depth of service is right from the outset. Full-service leasing bundles financing with components such as maintenance, wear, tyres, insurance, GAP cover, and fuel or charging cards.
A good provider makes these components modular and transparent. It also lets you differentiate services by vehicle class instead of forcing every leasing contract into a rigid package.
Anyone assessing the depth of service should put an honest figure on their own effort. Only by setting service costs against the internal working time saved can you see whether a component is worthwhile. Scalability also matters. A service model that works for 20 vehicles must also work as the fleet grows.
Professional claims management determines how quickly damaged vehicles are back on the road and how high the follow-on costs are. The key question here is who manages the claim, the provider or the fleet.
Integrated claims management can take work off the fleet's hands and bring together workshop, insurance, and replacement mobility. For insurance, it is worth looking closely at the deductible, cover, and claims settlement practice. After all, a cheap policy is of little use if claims are handled slowly or with frequent disputes. Replacement vehicles and pick-up and delivery services also belong in the assessment, because they determine how hard a claim actually hits day-to-day operations.
The provider should make consumption, costs, claims, and terms available in a structured and up-to-date form. What matters is the depth of the data and whether it can be exported. A portal that only shows standard data and invoices is of little help. Analysable reports, clean master data, and traceable cost centres are better. Early warning indicators are also valuable, such as alerts for expiring contracts, mileage deviations, or unusual claim rates, so that fleet managers can take action in good time.
In addition, the fleet is often one of a company's most significant sources of emissions, and its data ultimately feeds into ESG reporting. The leasing partner should therefore provide CO₂ data per vehicle and for the whole fleet in a form that can be analysed. Flat-rate values would only make reporting and managing electrification harder. CSRD-relevant metrics and scenarios for fleet transformation also belong here.
Vehicle returns are often where the most disputes and the highest costs lie. Assessing signs of use and damage in particular becomes a point of contention. Without a clearly defined return standard, "normal wear and tear" quickly turns into a chargeable reduction in value.
A fair partner works with transparent, ideally independent appraisal standards and a traceable damage catalogue. This protects the fleet from surprises and makes costs predictable.
A good leasing partner should allow adjustments, for example to the term and mileage. Ideally, there are also rules for early return or for swapping individual vehicles. This flexibility should be set out in the contract, as should the cost of early termination. Planning the exit from the start leads to fairer negotiations and keeps you able to act if the partnership doesn't work out.
Where even a flexible leasing contract reaches its limits, a car subscription can complement the fleet, for example for fixed-term projects, probationary periods, seasonal peaks, or new employees whose company car has not yet been delivered. A car subscription usually runs for just a few months, and insurance, maintenance, and vehicle tax are included in the monthly rate. In return, the rate is usually higher than for a comparable leasing contract. Our comparison of car subscriptions and leasing shows how the two models differ in detail.
A uniform assessment grid with weighted criteria helps with the decision, so that the rate alone doesn't tip the balance. References from customers of a similar size and industry show how a provider works day to day and when disputes arise. If you are unsure, start with part of the fleet before switching over the entire fleet.
Most disputes in company car leasing arise on return and from clauses nobody read carefully when signing. Before signing, companies should check these points in particular:
For larger fleets, it is worth having the framework agreement reviewed by an expert. If you only use company cars where they are needed for work, a mobility budget instead of a company car offers an alternative for all other employees.
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