Separate three stages of payment
At the start, you may make a down payment. Check which VAT and one-off charges you must pay yourself. The offer should make clear what is included in the finance.
During the term, you normally pay principal and interest. Principal repayments reduce your debt. Interest is the charge for borrowing. Insurance, maintenance, vehicle tax and running costs are usually paid separately.
At the end, any agreed final payment becomes due. This is additional to the regular instalments. Check exactly when the last regular instalment and the final payment will be collected.
Before signing, ask for a payment schedule that makes these amounts clear. A monthly figure alone is not enough to compare offers properly.
Why does an interest rate not tell the whole story?
Ask which amount interest is charged on and whether the quoted percentage is monthly or annual. Have the lender explain whether interest is based on the outstanding balance or calculated another way. Rates using different assumptions are not directly comparable.
A final payment remains part of the debt during the term. Interest may continue to apply to it under the agreement. A larger final balance can therefore reduce the monthly instalment without making the finance cheaper.
Also ask whether the rate is fixed, which one-off costs apply and the total amount payable under the schedule. We do not publish a general interest rate as a promise for every application. The lender provides the final offer.
A final payment is not a guaranteed trade-in value
Suppose €6,000 remains payable at the end. If the car sells for €4,500, you still need €1,500 to settle that balance. This is an illustration, not a forecast for any particular car.
You could set money aside rather than rely entirely on a sale. Building a €6,000 reserve over 60 months means saving €100 a month, ignoring savings interest. This is not an additional lease instalment. It is your own reserve for an existing obligation.
Refinancing is not automatic either. It would require a new assessment and new terms at that time. Do not base your plan on refinancing that has not been agreed.
How to compare two offers
Start with the same car and check that both offers use the same purchase price and VAT basis. Then compare the same down payment, term and final payment. A difference in one input may explain a different monthly instalment.
Next, work through these three questions:
- What is the total amount payable under the finance? Ask for the number and amount of instalments, the final payment and separate charges. Do not count a charge twice if it has already been financed.
- What do I pay outside the finance? Consider your own contribution, VAT you must pay yourself and charges outside the purchase price. Keep these separate from interest and finance charges.
- What happens if my plans change? Check the conditions for additional repayments, early settlement, sale and trade-in. Ask which charges currently apply.
Then check whether both the finance payment and other expenses fit your budget. The lowest monthly figure is not automatically the cheapest or most workable option.
VAT and tax deductions are a separate question
For Dutch VAT purposes, financial lease is generally treated as a supply with VAT charged at delivery. Check the invoice and payment arrangements. Do not assume VAT will be financed or refunded immediately without confirmation.
A margin-scheme vehicle has no separate purchase VAT to reclaim. For a VAT vehicle, recovery depends on factors including VAT-taxable activities and vehicle use. Your accountant can assess the consequences for your business.
Principal repayments and expenses are also different in your accounts. A monthly amount leaving your bank account does not mean the whole amount is tax-deductible. Have interest, depreciation and private use treated separately.
Planning to repay early or sell the car?
Ask the lender for a written settlement figure for the intended date. It may differ from the sum of the instalments remaining on your calendar. Ask for an explanation of any charges and how long the figure is valid.
Do not agree a sale or trade-in as though the car were already free of finance. Check consent, payment to the lender and release of title or security. Capital Lease can help coordinate the conversation, but does not decide on the lender's behalf.
Put a calculation or offer beside your budget
Use the calculator to explore the effect of a down payment, term and final payment. The result remains an estimate. For a real comparison, use the amounts and terms in the final offer.
Sources for this guide
The Dutch Chamber of Commerce explains lease types and contract considerations. The Dutch Tax Administration explains VAT on lease agreements and business vehicles. These sources are in Dutch. Your own agreement and tax circumstances remain decisive.