Drive, buy
In the market for a new car? Looking for a good deal to finance it? The 90th Motor Show runs until January 22 at Brussels Expo, and traditionally this is an event where dealers offer special incentives for buying cars. Here we take a look at what options are available when it comes to paying for a car in Belgium.
Leasing
This option is generally more suitable for and available to companies. In addition to loans, car dealers also offer lease arrangements. With Toyota, for example, if you buy a car worth €23,580 (including VAT) and make a deposit of €2,000, your monthly payments would be €145.41 (including VAT) over 60 months. The residual amount to pay back at the end of the term would be €3,563.92 (15 percent of the initial price). This residual payment can be reduced to 10 percent by making higher monthly payments.
Go directly to a leasing agency
LeasePlan offers two types of leasing. The financial lease is comparable to a car loan, whereas the operational lease covers all expenses (repairs, insurance, petrol card, taxes, replacement car, breakdown service and so on). In both cases you have the option to buy the car at the end of the contract but at different rates and conditions.
If the car is used on a professional basis, leasing payments can be tax-deductible, with amounts depending on whether you are a corporate user or self-employed. The percentage also varies according to the level of CO2 emissions, from 400 percent for electric cars down to 50 percent if the level of CO2 is very high.
Deductions vary according to the ratio of professional/private use of the vehicle. At the generous end of the scale, scooters used for professional purposes only (for example pizza deliveries) are 100 percent deductible.
The maximum lease term is five years, and mileage can be restricted. Some companies offer the option to buy the vehicle at the end of the term. DirectLease offer two options. The leasing company can be the sole owner of the car when the term expires or you can buy the car at the end of the term for 16 percent of the initial investment.
So, if a car costs €10,000 at outset, the residual amount needed at the end of the contract to buy the car would be €1,600. DirectLease quotes vary according to the brand of the vehicle, the cost, the term of the lease and so on. The package also includes servicing, repairs, replacement cars and insurance.
High street loans
One of the peculiarities of the Belgian marketplace is that it is very difficult to compare rates online or to get information over the phone, as banks invariably won’t release information unless you make an appointment. This is rather tedious, but to give you an idea, Centea offer a 60-month loan at 5.5 percent, while for a longer term of 120 months, the rate is 6.5 percent. The high street banks usually offer lease arrangements as well.
Buying outright
If you are in a position to do so, this may be your best option, as loan interest rates are not as favourable as they were prior to the financial crisis. You should always ask for the best price for a car with and without finance, as quite often the price is lower if you pay cash. In other words, a very tempting low interest rate loan could in reality be hiding a much higher interest rate loan, which is partly funded by a higher car price.
Conclusion
It’s worth visiting the motor show, as you’ll be able to shop around for the best deals on cars, private finance and auto-leasing. During the rest of the year, always ask for special offers when contacting your dealer.
Leasing offers several potential tax benefits and can be very beneficial for businesses who have a large turnover of staff and self-employed individuals who use their car on a professional basis. It may be worthwhile consulting a tax adviser to assist with your tax return computations.
For information on prices, opening times and accessibility at the Motor Show, see:
