Are you, just like the average Belgian, in love with a new and cared for car? Then you can check how you can best finance that beautiful car.
Do you use your savings? Are you going to take out a car loan? Or are you opting for a private lease this time?
And what are the advantages and disadvantages of such a private lease?
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Car loans are currently so cheap (0.65% APR at Beobank!) That it is absolutely worthwhile to take out a loan to buy a new car.
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A private lease is a long-term rental of a car that also covers all possible additional costs for the car. Most private car lease formulas are geared to a duration of 2 or 4 years. The conditions of the private car lease agreement differ from leasing company to leasing company.
Also note the possible additional cost for certain options. So it’s best to make a comparison exercise to find the cheapest private lease. First think about what you want and can handle. Then you can get started. Nowadays this can easily be done via the internet. With just a few clicks you can view the complete range on the market and know exactly where you stand. If you opt for a private lease, you save a lot of money that way at the end of the ride.
Thanks to the fact that you change cars every 2 to 3 years, you start driving economically and environmentally consciously. For most people, however, this is unfortunately only a nice side effect. From a purely financial perspective, there are two more advantages.
Firstly, with this formula you do not have to pay an advance at the start of the contract. And, you do not pay any residual value after the contract. The logical reason for this is that the car manufacturer or leasing company remains the owner of the car for the entire duration of the agreement.
Furthermore, with a private lease you have a monthly predictable amount. After all, through a private car lease formula you know in advance how much you will have to pay for the car each month. Every possible cost, except the cost of the fuel, is included in the leasing price.
As with just about everything in life, there is also a downside to the coin. Where with a car loan you could sell the car on the second-hand market after repayment of all periodic payments, after the private car lease you have no tangible possession.
Moreover, a private lease is a long-term agreement. Unless you pay a high severance payment of sometimes up to 50% of the remaining monthly amounts, it is not possible to terminate the lease.
A third disadvantage is that as a user of a private car lease you have to state at the start of the contract how many kilometers you think you drive each year. So you have to make an estimate. The estimated kilometers are an indication to calculate the monthly lease price. As you drive more kilometers on an annual basis, the residual value of the private car lease will decrease and therefore the monthly lease price will increase!
A final disadvantage is that just about no lease company or car manufacturer wants to make a lease car available without comprehensive insurance. This will of course have a considerable influence on the cost price of the lease.
Do the necessary private car lease simulations before signing the lease agreement. Try to maintain sufficient financial reserves to repay the monthly lease price if, for example, you were forced to change jobs. Tip: certain leasing companies offer supplementary insurance whereby you can protect yourself against unpleasant circumstances that have an impact on your financial possibilities, such as forced dismissal, divorce or death of the partner.
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