Private lease has been gaining popularity for several years. In 2020, the number of private vehicles leased by businesses increased to 214,000 (source: VNA lease). Private lease can be especially interesting for self-employed professionals, instead of using a private car for business trips.
What is private lease?
Private lease means leasing a car for a fixed amount per month, for a fixed period. This amount covers the cost of depreciation, insurance, motor vehicle tax, repairs, maintenance and tyres. This leaves you to pay for fuel, any traffic fines and an excess in the event of damage. The leasing company remains the owner of the car. You lease the car for a minimum of 12 months and a maximum of 60 months. After that, you return the car.
Are you self-employed and considering private lease? It is good to know that there is a difference between private lease and business lease. With private lease, you may not deduct the lease costs as a business expense. You can do this with a business lease, but then you have to deal with an addition for private use (‘bijtelling’) if you use the car privately. If you lease a car for private use, there is no addition for private use.
What makes private lease interesting?
Money remains available for your business
Savings that you reserve for the purchase of a vehicle can be used for something else. For example, business growth or private expenses. If you choose private lease, the leasing company purchases and owns the vehicle. You pay a fixed amount to the leasing company every month.
Security of expenditure
With the private lease contract, you have a clear overview of what you spend each month. You do not have to worry about unforeseen costs, such as repairs or changing tyres. The only additional costs are fuel, traffic fines or damages costs ('eigen risico').
No high interest for loans
If you have no savings to buy a vehicle, private lease may be a better option than taking out a loan. These types of loans often have high interest rates.
Tax benefits for entrepreneurs
If you use your vehicle for business purposes, you can avoid an addition for private use ('bijtelling') by taking out a private lease. You conclude the lease contract privately. This allows you to deduct €0.19 per business kilometre (in Dutch) as costs from your profit.
Deducting VAT on usage and maintenance costs is also an option if you use the vehicle for business purposes. You must keep track of your business kilometres for the Tax Administration. Note: if you decide to deduct these costs, you cannot include them in the lease costs and package choice.
Lease a used car
Do you think that a new vehicle is too expensive? Or do you think that you will not use your vehicle often? Then you can save money by leasing a used vehicle.
Good to know
Influence on maximum mortgage
Are you planning to buy a house? Keep in mind that lease obligations reduce your maximum mortgage loan amount, just like other repayment obligations. For example, with a monthly lease obligation of €400, you can borrow several tens of thousands of euros less.
BKR registration for car lease
If you enter into a private lease contract, this will be registered with Stichting BKR (in Dutch). This registration does not have to be a disadvantage. If you meet your financial obligations every month, your future lenders will conclude that you are perfectly capable of handling your financial responsibilities.
You choose a kilometre bundle depending on how many kilometres per year you plan to drive. Kilometres that fall outside the agreed bundle are more expensive than kilometres that fall within the bundle. With fewer business kilometres you can deduct less tax.
The lease cost must be paid monthly. Since the lease conditions in the contract are very strict, private lease is not recommended if you have large monthly income fluctuations. A short-lease product may offer a solution, as this can often be cancelled every month.
Breach of contract
You cannot just cancel a lease contract. The costs of a breach of contract with a private lease are high. Relocation, divorce or periods of few assignments often lead to the dissolution of the private lease contract. Tip: you can dissolve your contract free of charge with a pre-made protective construction, for which you pay extra. This gives you more flexibility.
Climate agreement and private lease
The Climate Agreement (in Dutch) is part of the Dutch climate policy. It is an agreement between organisations and companies in the Netherlands to further combat global warming. The aim is to reduce CO2 emissions by 49% by 2030. Because of this, there are more and more possibilities to lease private electric cars.
Subsidy Scheme Electric Passenger Cars Private Individuals (SEPP)
Have you considered private leasing an electric car? Driving a fully electric passenger car in the smaller or compact middle class via private lease can be advantageous. Check if you may be eligible for the Subsidy Scheme Electric Passenger Cars Private Individuals ('Subsidieregeling Elektrische Personenauto’s Particulieren', SEPP). This scheme is only open to private individuals. If you meet the conditions you are eligible to receive a one-off subsidy. The subsidy is available until 1 July 2025 and a fixed maximum amount is available each year.