Tips for choosing and financing a new or second-hand car
If you’re thinking about a new set of wheels, you have a lot of options to pick from. But which car best suits your needs?
Should you go for a new or second-hand vehicle and should it be electric, a hybrid model or one running on petrol, diesel or LPG?
- Elektric, hybrid or running on petrol, diesel or LPG?
- New or second-hand?
- Financing tips
Not sure whether to buy new or second-hand? Check out our tips!
Let's start with the first decision: should you go new or second-hand? Both have advantages and disadvantages. We discuss them in detail below and offer some tips to help you make an informed decision.
A new car
If you opt for a new car fresh off the factory line, you tend to have lower maintenance costs, especially in the beginning. You can order the car to your specifications and you have more choice in terms of colour, fuel type or any gadgets. Depending on which car you choose, it might even be more environmentally friendly than a similar second-hand car. New cars also offer more choice when it comes to picking a more eco-friendly vehicle. Another advantage when buying new is that you generally get a longer warranty.
- Fewer maintenance costs
- Order your car to your specifications
- May be more eco-friendly (depending on the model chosen)
- Longer warranty than for a second-hand car
There are also drawbacks to a new car: the purchase price for a similar model is (usually) higher than for a second-hand car, so you should take that into consideration. Sometimes it can also take several months to a year until your new car finally arrives. If you don't want to wait, a new stock vehicle is a good option. An added bonus is that stock vehicles are often slightly cheaper and available more quickly. Lastly, it’s also important to note that the cost of insurance is often higher than for a second-hand car because you’re more likely to take out comprehensive insurance
- More expensive to buy than a comparable second-hand car
- It takes a while to get the car
- A stock car is a faster option in terms of delivery
- Insurance is more expensive than for a similar (older) second-hand car
* Depending on the insurance chosen and the age of the car.
An electric car is usually more expensive to buy and costs more to insure, but you don’t pay any road tax or VAT in Flanders. The maintenance cost of the engine is much lower on average, but you will need new tyres sooner. A second option is a plug-in hybrid. This type of vehicle combines a diesel or petrol engine with an electric motor. You can easily charge the electric motor by plugging it in at home. You do pay road tax for this type of car, but due to its lower CO2 emissions (according to WLTP standards), they are lower than for a car that only uses diesel or petrol. Lastly, there are cars that run on petrol, diesel or gas (LPG and CNG).
The vehicle registration tax you have to pay will depend on the type of engine or motor in the vehicle. This is calculated based on the environmental friendliness of the car, accounting for factors such as CO2 and particulate matter emissions.
- You have to pay road tax and vehicle registration tax for all cars except electric vehicles.
A second-hand car
A second-hand car certainly has its advantages: it is often cheaper to buy and the cost of insurance is often lower than for a new car, because you usually don’t take out fully comprehensive insurance and the vehicle is worth less. An additional advantage is that a second-hand car is available more quickly. There are also some drawbacks: you often have to spend more on maintenance, so you should pay careful attention to the Car-Pass. Both private sellers and businesses are legally required to provide a Car-Pass (which is no more than two months old). You’re also unable to personalise the car and sometimes there are hidden defects.
More and more electric cars are finding their way onto the second-hand market. While the more competitive price is certainly welcome, there are a number of things you need to look out for when buying a second-hand electric car. One tip would be to ask about the condition of the battery, the range, the battery’s warranty, the vehicle’s electrical equipment and gadgets, and finally the on-board charger.
When it comes to the engine or motor, the same rules apply as for new cars – you have to pay road tax and vehicle registration tax unless it’s a fully electric vehicle.
| Benefits | Drawbacks | |
| A new car |
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| A second-hand car |
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* Compared to the same model when bought second-hand.
Three tips for buying a car
• Take your time to compare and take a test drive. Don’t allow yourself to be pressured into making a quick (and potentially ill-considered) decision.
• Make comparisons based on the net price (after taking into account discounts and premiums) and not based on the list and option prices.
• Negotiate the price and/or additional options. Get quotes for models you’re interested in and compare them.
Financing your new or second-hand car
You’ve made up your mind and decided on the car you’ll soon be admiring on your driveway. Now for the financial side of things – be sure to read our tips on financing your new or second-hand car and find out which option suits you best.
Using your own funds or savings
Buying a car with your own funds is a popular option. While this will certainly put a big dent in your savings (especially if you buy a new car), it still remains one of the most widely used options for financing your car. This approach is particularly worthwhile if you have sufficient money in reserve.
Private lease
A private lease offers an all-in lease package. You only rent the car (never becoming its legal owner) and costs such as for maintenance, taxes and assistance are all included in a monthly lease payment. When the lease ends, the car goes back to the lessor.
Balloon loan or bullet loan
Strange names for a loan, but what do they mean? A balloon loan (also called a residual value loan) means that repayment is divided into smaller monthly instalments. The larger amount left over (agreed in advance) is then paid at the end of the loan term.
A bullet loan (also called an interest-only loan) means you only pay the interest during the term of the loan. At the end of the term, you pay off the bullet loan in a single, lump-sum payment (bullet payment).
Taking out a car loan
Lastly, you can take out a car loan (instalment loan) to finance your purchase. You can borrow from both the bank and the dealer, but be aware that if you arrange an interest-free loan from a dealer, you often can’t negotiate other discounts. Remember, borrowing money also costs money!
Example: The cost of a new car can easily reach 20 000 euros. If you take out a loan at an interest rate of 4.39% to buy it, you’ll pay 878 euros in interest over 36 months, which means you’ll save 878 euros if you opt for an interest-free loan. But as mentioned above, the chances of getting any additional discounts are slim. You should definitely look into this, because dealers often offer discounts of 3 to 19%. In this example, that would amount to a discount of between 600 and 3 800 euros. In other words, you may be saving money when you opt for a standard car loan.
You can, for example, take out a loan at KBC Brussels for a new, second-hand, or even electric car at a rate specifically applicable to that type of vehicle. If you’d like to calculate how much you’d have to repay each month, feel free to run a no-obligation simulation, even if you’re not a customer with KBC Brussels.
* Loan type: Instalment loan. Lender: KBC Bank NV, Havenlaan 2, 1080 Brussels, VAT BE 0462.920.226, RLP Brussels, FSMA 026256 A. Subject to your loan application being approved by KBC Bank NV.