Leasing in Germany

The leasing sector is Germany’s most powerful investment engine and largest investor; over the twelve months of 2019 it generated investments to the tune of 75.0 billion euro, and 2 million new leasing agreements were concluded in the same period. Medium-sized companies in particular are well represented among the ranks of leasing customers. 

Investments by the Leasing Sector

Leasing Investments

In 2019 almost a Quarter of All Investments in Equipment were Financed through Leasing

Leasing Penetration Rates

Leasing penetration rates in Germany: the percentages of aggregate investment and of investment in equipment accounted for by leasing. Statistics on the penetration rate of leasing in the real-estate segment have only been compiled since 1981.

Externally Financed Investments: Well over Half Made through Leasing

Percentage of Externally Financed Investments Accounted for by Leasing

More than half of all externally financed investments were realized through leasing. The ifo Institute for Economic Research conducted a study of external financing that included a breakdown of the different sources of capital, and also showed ratios of external financing to internal financing. In this study, external financing is defined as the raising of capital from sources outside of the company in question. This external financing could be in the form of deposit funding or equity financing (e.g. through share issues, or capital paid in by partners or shareholders). Alternatively, it could be debt financing (e.g. through bank loans, credits, or funding from public sources). Or it could also be leasing. In the course of its Investment Survey for the period from 1986 to 2001, the ifo Institute gathered information about how companies in the manufacturing sector financed asset addition. Because the source used up until 2001 for the direct querying of data was not available from 2002 onwards, an estimation model has had to be used since then. The model adopted takes the results obtained for the years from 1988 to 2001 on the basis of annual leasing penetration rates for movables and real estate and annual rates of growth in new business and extrapolates these into the years post-2002. The results thus obtained have always been within one percentage point of the actual trend, which is a perfectly acceptable margin of error. The current figure is based on a projection of this kind.

Customer Groups in the Leasing Sector

Share in the Leasing Business, in percent

Types of Equipment-Leasing Agreement

Breakdown of new equipment business by agreement type

Equipment-Leasing Sales Channels

Share of the Sales Channels in the Equipment-Leasing New Business

Leasing in Europe

24.0 percent of equipment investments in Germany are financed through leasing. This penetration rate is much lower than in the USA, which is the world’s leader in the use of leasing services. But compared with other European countries, Germany comes out alongside the UK in joint top place in the leasing rankings. Further strategic data on the European leasing market can be obtained from Leaseurope, the umbrella organization of the continent’s national leasing associations. 

Top 5 Leasing Markets in Europe

 
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