How does financial lease work?
With financial lease you buy a car, but the lender pays for it on your behalf. You repay that amount with interest in fixed monthly instalments. You're the economic owner from day one: the car is on your balance sheet. After the last instalment you also become the legal owner.
The benefits
- You become the owner. No return damage charges or mileage penalties at the end.
- VAT back in one go on a VAT car, through your next VAT return.
- Deductible: interest and depreciation are business expenses.
- KIA on vans: up to 28% extra deduction.
- No mileage limit.
- Fixed interest rate for the whole term.
The conditions
- You have a business registered with the KvK.
- Term from 12 to 72 months.
- New cars and used cars, usually up to 8 to 10 years old at the end of the term.
- You arrange maintenance, insurance and road tax yourself.
Who is it smart for?
For freelancers and SMEs who use their car or van for business, drive a lot and want to keep the car for a long time. Prefer all-in-one without any worries and often switch cars? Then operational lease may suit you better.
Financial lease and operational lease: the difference
With financial lease you become the economic owner. You put the car on your balance sheet, depreciate it and after the last instalment it's yours. With operational lease you rent the car: a fixed monthly amount including maintenance and insurance, but you build up nothing. Financial lease is usually cheaper over the full term, operational lease is more carefree. Read the full comparison.
Example calculations
| Price incl. VAT | 48 mo | 60 mo | 72 mo |
|---|---|---|---|
| € 20.000 | € 378 | € 317 | € 276 |
| € 30.000 | € 568 | € 475 | € 414 |
| € 40.000 | € 757 | € 634 | € 552 |
| € 50.000 | € 946 | € 792 | € 690 |
| € 60.000 | € 1.135 | € 951 | € 829 |
VAT car, financing excl. VAT, 10% balloon payment, 8,5% interest. Indicative.
Balloon payment: how high?
The balloon payment is the amount you pay in one go at the end. A higher balloon payment lowers your monthly payment, but you pay interest on that part for longer. Keep the balloon payment below the car's expected residual value. Then you can always pay it off when you sell. For a van, 10 to 20% is common. All about the balloon payment.
Tax: what can you deduct?
- VAT: with a VAT car you reclaim the VAT in one go.
- Interest: the interest part of your instalment is a business expense.
- Depreciation: you depreciate the car over its useful life, usually five years.
- KIA: on vans, up to 28% of your investment. Calculate KIA.
From application to keys
- Application (2 minutes). Enter your business, your contact details and the vehicle. Haven't chosen a car yet? You can add it later.
- Proposal. We submit your application to the lender that best suits your situation and send you a proposal with the interest rate, monthly instalment and balloon payment.
- Documents. Usually an ID, a KvK extract and a few bank statements. You upload them securely on your personal status page.
- Sign digitally. Once approved, you sign the contract online.
- Payout and collection. The lender pays the seller directly. You collect the car.
What does a car really cost per month?
Your monthly instalment is only part of the story. Also factor in:
- Road tax: depends on weight, fuel and province. Calculate your road tax.
- Insurance: with financial lease, comprehensive cover is often required until the car is paid off.
- Maintenance and tyres: you're the owner, so you arrange this yourself. Budget € 50 to € 120 a month.
- Company-car tax (bijtelling): if you use a passenger car privately, you pay bijtelling. Calculate your bijtelling.
On the other side is your tax benefit: interest, depreciation and car costs are deductible, and with a van you can claim KIA. Calculate your net costs.