Private leasing has become an indispensable part of the Dutch car landscape. Drive a car without worrying about residual value, trade-in or maintenance and with a monthly payment so you know exactly where you stand. But there are catches.
With the rapid improvement in quality of new cars in combination with rapidly rising fuel prices, it is becoming increasingly attractive for private individuals to switch to a new car via private lease. This applies even more to electric cars. They are very expensive to purchase, but if you can drive them through a lease construction, you can avoid the high petrol costs. Especially if you have solar panels to reduce your own power consumption.
1. Breach of contract is expensive
But what are the disadvantages? First, breach of contract is expensive. Do you want to get out of the contract because your personal situation changes, for example due to a divorce or dismissal? In many cases you will then pay a fine.
2. It is cheaper to pick up a second-hand car
Private leasing is also not the cheapest form of driving. That remains the complete drive-up of a used car. Borrowing money from the bank to purchase a car can sometimes even be cheaper than private leasing. So consider that option carefully.
3. Costly when driving little or a lot
Moreover, private lease is more expensive than you think for low mileage: many private lease contracts assume a certain mileage per year, for example 15,000 kilometers. If you drive much less in practice, this will not always be charged to you. But it is also expensive if you use it too much: if you drive more kilometers than agreed, the leasing companies will charge extra costs of 5 to 16 cents per kilometer.
4. Claim-free years can be lost
If you are not careful, there is a risk that your claim-free years will be lost. The Consumers’ Association reports: “With your own car insurance, you build up claim-free years for every year that you do not drive with any damage. But with a lease car, the insurance is often in the name of the leasing company or your employer.
“Some leasing companies look at the claim-free years that you have accrued and which are stored in a central database (Roy-Data). With these affiliated leasing companies you automatically keep all the claim-free years you have accrued, both before and during the lease period. But please note that the leasing company often does not keep track of the claim-free years automatically. This is done manually and only at the request of the lease driver.”
Menno Dijcks from comparison site Independer adds: “You can request a lease statement from the leasing company. Such a lease statement states how many years you have driven the car without claiming damage. Most insurers simply adopt the claim-free years of this lease statement.”
5. Deductible in case of damage
The insurance costs included in the monthly amount are the same for all drivers. Especially if you have almost the maximum no-claim discount, it is almost always cheaper to borrow money to buy a car. And there is a deductible in case of damage. Insurance is included in the contract, but in the event of damage there is often a deductible of up to 500 euros.
6. Consequences for your mortgage
Private leasing also affects your mortgage options. These consequences cannot be underestimated, also given the often long term of a private lease contract. If you plan to buy a house in the long term, private leasing limits the maximum amount you can apply for a mortgage. You already have a financial obligation. And the differences are significant. You can sometimes borrow tens of thousands of euros less.
7. At the end of the lease you have nothing
Another disadvantage is that you have nothing at the end of the lease contract. Normally you always have a car to trade in, unless it is a total loss. But when your contract expires, you hand in the car and start again from scratch. You can of course enter into a private lease contract again, but you are better off if you still have a nice used car to trade in. Suppose you are so satisfied with your car that you want to take it over from the leasing company, then that is often possible, but at the bottom line you would probably have been better off if you had bought the car yourself at the time, with or without a favorable loan.
Your own situation
Do you want to know what you spend per month on depreciation, motor vehicle tax (MRB), insurance and maintenance (including tires)? Then look up the car of your choice (or your current car) in Autoweek’s Private Lease Comparator to calculate the lease amount and find out what is most favorable for you.
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