Financing your car
Instalments, interest-free loan or lease?
Buying a car is a substantial investment. Whether you’re buying your first car or looking to replace your current one, how you finance it is just as important as the car you choose. Want to dip into your savings, prefer to take out a loan you can pay off in instalments, or been considering an interest-free loan? Whatever it is, explore our smart car finance options below and find the best one for your budget.
We can help you make the right choice
It’s best to base your decision on a number of factors, including your personal situation. How much can you set aside? How long do you want to be tied to a contract? And do you want to own a car or do you just want the use of one?
Three things to consider in making your choice:
- Your budget: how much do you want or have to spend?
- Your preference: do you want to own or lease a car?
- Your preferred term: how long do you want to be tied to the car or financing?
A new, second-hand or lease car?
Choosing a new car means choosing security. You drive off in a car in mint condition, equipped with the latest technology and including a full warranty. A new car does of course come with a higher price tag and its value drops pretty quickly in the first few years.
Budget-wise, a second-hand car is often a better choice, especially if you buy it from an authorised dealer, where you’re more likely to find a reliable car and get a warranty. If you decide to buy a car from a private individual, there are a number of things to watch out for, such as:
- The kilometre reading (always check the Car-Pass)
- The maintenance history
- The car’s overall technical condition
You can also opt for leasing, where you pay a monthly fee that usually includes maintenance and insurance costs. You might not own the car, but you do know exactly what to expect. Leasing is an attractive option for those who value convenience and predictability.
What’s the best way to finance your car?
If you don’t have the ready resources at your disposal to buy a new car, it’s good to know you have a number of options to finance it.
If you have enough savings, you can choose to purchase the car outright. There’s no interest involved, so it seems like the most economical choice. However, it also means you’ve taken a big bite out of your savings, leaving you with little or no room to cover any unexpected expenses.
That’s why buying a car on finance is a smart and popular solution. It lets you spread the costs over several months or years, so you get to keep your savings for other purposes. Key aspects of a good car loan:
- Transparent interest rate: all costs are known upfront
- Flexible terms: tailored to your budget
- Short approval times: often in a matter of hours
Some car dealers offer their own finance options. Be sure to always read their conditions very carefully and watch out for hidden costs or restrictions like mandatory maintenance contracts or a higher residual value.
Another interesting option is a leasing solution, such as a finance lease or an operating lease. The tax benefits and fixed costs make this an attractive choice for businesses. The biggest difference lies in who owns the car and who bears the costs. Private individuals can opt for a Private Lease, where they pay a fixed monthly fee for a car (including maintenance, insurance and tax) without actually owning it.
Choosing a car loan
Car loans don’t have to be complicated. The KBC Car Loan offers you:
- A transparent interest rate – no surprises
- Flexible terms to suit your budget
- An online loan simulation tool that lets you know what to expect
It ensures you have the financial breathing space you need and the potential to be driving around soon in your new car!
