auto finance center
How do I finance a car?
There are roughly four ways to finance a car: an employer-owned lease car, through savings, a loan or private lease. We list the pros and cons of the various options.
The cheapest option is saving. After all, borrowing money costs money. You also pay money for the service of private lease companies.
1. Lease car from the employer
The lease car that you get from your employer and that you use privately is seen as wages and therefore taxed. This is done in the form of a percentage of the list price of the car. The higher the list price, the more expensive the car is for you. For energy-efficient cars, lower additional taxes apply than for gas guzzlers.
You can avoid the additional taxable benefit by not driving the employer's car for private use. For this you must keep a comprehensive trip log.
2. Savings
The use of savings is always the cheapest.
3. A loan
A personal loan is more suitable for the purchase of a car than revolving credit. You pay a fixed amount during the term and you know in advance when you have repaid the loan.
The term of the loan is preferably shorter than how long you want to keep the car. So that you are not still paying for a car you no longer have.
Find out what happens to the loan if the car breaks down during the term or if you want to sell it sooner.
31 %
of people who borrow money, borrow for a car
Source: Money Matters in Practice, 2015
4. Private lease
Private leasing is also called operating lease or operational leasing. Private lease is not a loan by law, but is more like renting. At the end of the contract, with private lease you are not the owner of the car. You may be able to buy the car after it expires.
What should you pay attention to?
What is included and what is not?
What happens if the car breaks down during the term of the contract? Or if you want to get rid of the car?
Is it possible to cancel the contract and what are the costs involved?
Check whether the monthly amounts are even or whether you are dealing with a much higher final payment (final instalment).
Income check
Although private leasing is not a loan by law, private leasing companies affiliated with the Keurmerk Private Lease do adhere to a number of rules that apply to taking out loans. For example, they will want to know your income to see if you can bear the burden. They will also check how many other loans you have outstanding.
They will register a private lease for a car with the xxxxxx Not for the full amount, but for 65%. This is because there are other costs in the monthly amount, such as insurance and maintenance. By registering with the BKR, lenders can take this requirement into account when you want another loan or a mortgage.
There are roughly four ways to finance a car: an employer-owned lease car, through savings, a loan or private lease. We list the pros and cons of the various options.
The cheapest option is saving. After all, borrowing money costs money. You also pay money for the service of private lease companies.
1. Lease car from the employer
The lease car that you get from your employer and that you use privately is seen as wages and therefore taxed. This is done in the form of a percentage of the list price of the car. The higher the list price, the more expensive the car is for you. For energy-efficient cars, lower additional taxes apply than for gas guzzlers.
You can avoid the additional taxable benefit by not driving the employer's car for private use. For this you must keep a comprehensive trip log.
2. Savings
The use of savings is always the cheapest.
3. A loan
A personal loan is more suitable for the purchase of a car than revolving credit. You pay a fixed amount during the term and you know in advance when you have repaid the loan.
The term of the loan is preferably shorter than how long you want to keep the car. So that you are not still paying for a car you no longer have.
Find out what happens to the loan if the car breaks down during the term or if you want to sell it sooner.
31 %
of people who borrow money, borrow for a car
Source: Money Matters in Practice, 2015
4. Private lease
Private leasing is also called operating lease or operational leasing. Private lease is not a loan by law, but is more like renting. At the end of the contract, with private lease you are not the owner of the car. You may be able to buy the car after it expires.
What should you pay attention to?
What is included and what is not?
What happens if the car breaks down during the term of the contract? Or if you want to get rid of the car?
Is it possible to cancel the contract and what are the costs involved?
Check whether the monthly amounts are even or whether you are dealing with a much higher final payment (final instalment).
Income check
Although private leasing is not a loan by law, private leasing companies affiliated with the Keurmerk Private Lease do adhere to a number of rules that apply to taking out loans. For example, they will want to know your income to see if you can bear the burden. They will also check how many other loans you have outstanding.
They will register a private lease for a car with the xxxxxx Not for the full amount, but for 65%. This is because there are other costs in the monthly amount, such as insurance and maintenance. By registering with the BKR, lenders can take this requirement into account when you want another loan or a mortgage.