Balloon finance: payment and final balance

Short answer #

A balloon defers principal to the end. Compare total interest, final balance and expected net sale proceeds, and document how a shortfall would be financed.

Important variables #

• Equal holding period and mileage
• Net sale proceeds and contract cost
• Energy, maintenance and insurance
• Liquidity and finance rate

Worked example #

With an €18,000 balloon and €15,000 net sale proceeds, €3,000 is missing. This is additional liquidity need, not a theoretical residual.

Break-even: What changes the result? #

Test the main driver as a cautious, central and optimistic range. Also check whether the ranking reverses at a crossover or remains robust across the range.

Common mistakes #

• Comparing monthly payments only
• Treating resale as certain
• Omitting one-offs or mileage

Sources & assumptions

• Bundesministerium der Finanzen — Steuerbefreiung für Elektroautos (2026-08-17)
• RATIOXA — Methodology and formulas (2026-08-17)