Why should I take out a private lease car?

These days it’s “hot” to lease your private car instead of buying it outright. Why is everyone doing this, what are the advantages but also the disadvantages? And what should you look out for when you want to get a new private car and are considering financing it with a lease construction?
In this article we want to give you a clear picture of lease constructions for a private car. So we’re not talking about a car you want to put on the company books or lease in any other business form.

What is private lease?

You drive a new car for a fixed net monthly amount during a pre-agreed period – this can vary from a minimum of 24 months up to a maximum of 72 months. At the end of that period you return the car to the dealer and the agreement ends. You don’t own the car; you borrow it for a fixed monthly fee. You pay for fuel yourself, as well as any traffic fines, and you have an excess in the event of damage. The best way to think of a private lease is as a long-term rental car.
The car is and remains the property of the leasing company, and you pay the lease fee to use it.

How private lease for cars came about

Banks and other lenders realised that a car is a relatively stable and marketable asset and that, when you attach the right lease to it, the residual value is sufficient to make a profit on the credit. After all, that’s how these lenders make their money: by lending at a certain interest rate while limiting the risk that the loan won’t be repaid. If a debtor (someone who owes money to the lender, i.e. the customer) cannot or will not pay, the car (the collateral) is sufficiently marketable and retains enough value to recover the borrowed money. That’s one side of the story.
On the other hand, consumers increasingly wanted a newer car, but the purchase price was and is a major obstacle. Thanks to the Private Lease construction – which you can also use partly – it has become easier to obtain new and more expensive cars. Because of the collateral, more can be lent than with a standard personal loan for a car, as that type of loan isn’t tied to the asset itself. In short: a win-win situation!

Who is eligible for a private lease?

Anyone who has a driving licence, has no listings at the BKR and/or other huge debts, and lives in the Netherlands (with some exceptions). You can simply be in salaried employment, as it concerns a private car.

The advantages of privately leasing a car

- You don’t have to dip into your savings, so you can use them for other purposes;
- The loan is much lower than with a personal loan, because the vehicle serves as collateral (security);
- You don’t have to ask others to lend you money;
- The car is new and often comes with an all-in price, including breakdown and damage cover;
- Few issues are expected, given that the car is new;
- You know exactly where you stand each month;
- After the contract ends you have no obligations, so you can easily switch to another brand-new car with a new private lease contract.

Where can I take out a private lease contract?

There are now many providers to choose from. Every lender sees, as mentioned earlier, the benefits of a loan that’s linked to an asset (in this case, the car). The range is wide, and it definitely pays to take your time and search online for the right providers. Look up reviews of private lease providers, compare on sites like Pricewise and request no-obligation quotes before you make your choice. Dealers are often a little more expensive, but the big advantage is that everything is arranged under one roof. You decide for yourself what the pros and cons are, and based on your needs you can search online for a suitable lender for your new car. Pay close attention to what’s included in the lease price so you can compare like-for-like. Think of liability insurance (included or not), roadside assistance, the maximum number of kilometres per year and accident insurance for occupants.
Some providers that offer private lease and have positive reviews are: Lease.auto.nl, Mijndomeinauto.nl and Leasem.nl

Hopefully the above has helped you make the right choice when buying your new car. Good luck with your search, the purchase and the handling of your lease contract. And above all: enjoy the drive!