Low residual value
You can take over ownership of the car at the end of the lease period for a standard 4% of the investment value.
Straightforward accounting treatment
Capitalisation and depreciation through the balance sheet.
Easily apply digitally
You can easily apply for your investment credit in KBC Touch, KBC Mobile or KBC Business Dashboard.
A company car is often an essential part of an entrepreneur’s life, whether the business is new or established.
But what if you don’t have enough cash to buy a car straight away? Or if you have other investments in mind or would like to put a little money aside?
KBC offers three different methods by which you can still finance your vehicle.
One way to finance your car is using a traditional investment credit. If you opt for this approach, you immediately become the owner of your vehicle – KBC simply helps you finance the purchase.
You can also opt for renting, which is an off-balance-sheet leasing method. In this case, you pay KBC a monthly fee to use the car.
The third option is leasing. With this method, you are the lessee and the accounting treatment of the car occurs via your balance sheet: capitalisation and depreciation. You also acquire the right to use the vehicle. We explain this in more detail below to give you an even more complete picture.
What is leasing?
Leasing allows you to go to a dealer of your choice and pick out the car you want. It’s also entirely up to you which insurance company you want to use.
The purchase invoice for your car will be in our name, making KBC the owner. You get the right to use the vehicle.
You don’t, incidentally, have to pay us anything upfront, as we pay the full investment amount, VAT included, to the dealer. Consequently, as soon as your contract begins, you also spread your VAT payments via the monthly rental bills.
You’re responsible in turn for things like maintenance, repair, tyres, breakdown assistance, fuel and insurance.
How does leasing work from the accounting point of view?
The accounting treatment of your rental invoices occurs monthly via the balance sheet: capitalisation and depreciation.
There’s no need to worry about additional collateral, which is not requested. This means you can keep your collateral capacity for other commercial loans.
More scope therefore remains for funding your operating capital and other possible investments.
How is the price of leasing calculated?
You pay a monthly leasing fee to KBC over a maximum of five years.
Your monthly payments are reduced by the agreed residual value at the end of your contract, which is between 1% and 15%. The standard figure is 4%.
You buy a car costing 20,000 euros with a residual value of 4%. In this case, you are spreading 19,400 euros, not including interest, over the selected term.
What is the residual value at the end of your contract?
It is possible to take over full ownership of the car at the end of the contract. To find out the price, simply look at the residual value agreed at the outset. The standard figure at KBC is 4%.
What’s the difference between renting and leasing?
Leasing and renting are similar at first sight, but it is important to be aware of several noteworthy differences.
In the case of leasing, for instance, accounting occurs in the same way as with an investment credit, namely via your balance sheet: capitalisation and depreciation.
The situation for renting is different. Here, you enter the invoice directly as an expense in your income statement. You can, moreover, take advantage of a higher first invoice of up to 30%.
Whichever method you choose, you always have a purchase option at the end of your contract. There is a difference, however, in the residual value specified there.
The standard figures at KBC are 16% for renting and 4% for leasing.
What happens at the end of your contract if you don’t want to assume full ownership of the business equipment and KBC is unable to sell it on at the agreed residual value? In that case, you pay the agreed residual value guarantee. Unless, that is, you agree a repurchase commitment in your contract. In that case, a third party undertakes to purchase the goods at an agreed price.
What’s the difference between an investment credit and leasing?
When you opt for a traditional investment credit, you immediately become the full owner of your vehicle. This is because you buy the car yourself – KBC simply helps you finance the purchase.
If you opt for leasing, you obtain the right to use the car.
Investment credit, renting or leasing: which is best for you?
Whether you choose an investment credit, leasing or renting depends to a substantial degree on your personal preferences and financial situation.
The various pages here will tell you about the main differences in terms of accounting treatment, the terms and conditions of the purchase option, who actually owns the vehicle and what type of owner they are. This way, you can find out straightforwardly which approach suits you best.
How do I apply for financial leasing?
- Choose a car and ask for a quotation from an official car dealer.
- Get your credit yourself online
- Application approved and contacts signed online? We will confirm the order with the dealer.
- You can pick your car up as soon as the dealer calls you. We do the rest.
- Pay the regular invoices to KBC.
A quick summary of the benefits of leasing
- It’s entirely up to you which dealer, car and insurance company you choose.
- Get an answer to your application within 24 hours.
- There’s no down payment. KBC pays the full capital cost, including the VAT, on the car to the supplier (the car dealer).
- You increase your lending capacity. No additional collateral is required. This means you retain your collateral capacity for other commercial loans and increase the scope for financing your operating capital and other possible investments.
- You repay the VAT over a longer period and KBC takes care of the prefinancing.
- Accounting occurs on the balance sheet via capitalisation and depreciation.
- You can purchase your car at the residual value agreed in advance at the end of the contract (standard amount 4%).