Car credit in Belgium
In Belgium, banks, dealers and car credit institutions offer a wide range to finance the purchase of a car.
These offers differ depending on whether it is a new or used car. Consumers, on the other hand, are looking for the best loan, those with an attractive interest rate and the best price, just as they are looking for the best seller. If you want to finance the car of your dreams at the best rate, compare the car loan offers in Belgium and make a simulation.
Car credit for individuals
Financing a car in Belgium for private individuals means having the freedom to choose between new vehicles and a second-hand vehicle. It is therefore free to choose between a loan for a new car or a loan for a used car.
Classic car loan
Lenders can be banks. In this case the monthly payments are fixed. The maximum duration is determined by law on the basis of the car loan granted. The car loan can be written off over 3, 4 or 5 years. Credit institutions can also be a concession holder. In this case we are talking about forward sales.
Lenders can also be credit institutions. They offer car loans in various forms, but in general they are installment loans. Balloon credit and eco-car credit are examples of this. Each offer has its own specific characteristics. The rate varies depending on the age of the car. The rate of used car loans is generally higher than that of new car loans.
This is a financing method that includes a purchase option of more than 15% of the purchase price of the vehicle. From an accounting point of view this is a rental price, the advantage of which is that the repayments are processed immediately. However, the monthly payments are subject to VAT.
This financing contract has a purchase option of less than 15% of the vehicle price. The depreciation of 3, 4 or 5 years therefore has its purpose. What it has in common with renting is that monthly payments, capital and interest are subject to VAT.
Ready for professional use
Different types of vehicles can be the subject of a credit in Belgium. They can be mobile homes, but they can also be commercial vehicles for companies or connecting cars for professional use.
This formula is popular with Belgian professionals. Three parties are involved in a lease contract, namely the borrower, the concessionaire and the leasing company. In this context, there are generally two types of offers that are operational leasing and financial leasing. The first can be considered as a loan for new or used cars to SMEs or companies, but without buying them. The second, on the contrary, is a contract where the borrower becomes the buyer.
In a lease agreement, many parameters have to be taken into account to state only the residual value of the vehicle, which is no other than the resale value. It amounts to a maximum of 15% of the investment value, knowing that the standard minimum is 4% of the same value. Mileage is also an important detail. A company that enters into a lease contract pays rent periodically. During the term of the loan, the car is included in the company’s balance sheet. As a result, it is written off.
The company that concludes a lease contract takes over the registration of the vehicle and its insurance. The first rental price can be increased. There are two calculation methods for this contract: the closed calculation for full service leasing and the open calculation for large companies with a fleet of more than 10 cars. The calculation of the total lease price is based on a closed calculation. For both, the monthly payment is always fixed, but for the first, it always includes all costs. For the second it includes all services.
This is called a professional installment loan or PATP. It is a loan for the purchase of the car. It is valid for both new and used vehicles. If you are considering financing the purchase of your car through PATP, choose an installment loan whose repayment period does not exceed the economic life of your investment. So, whether your loan is short or long term. It also depends on the life of the car. The interest calculation of a PATP depends on your repayment method and the duration of your repayment and the period of withdrawal. Advance payment is possible, with a reinvestment deduction of six months interest.