‘Belgians borrow on average 17% more to buy new car’
The amount borrowed by Belgians for their new car has increased by 17% in five years. Last year, Belgians borrowed an average of 15.400 euros to buy a car. According to Belfius Bank’s figures, this amount was 19.200 euros for a new car, and 12.500 euros for a second-hand one. This is 17% more than five years ago for a new car, and 22% more for a used one.
Loan term up to 60 months
“In 2019, 57% of car loans were for the acquisition of a second-hand car, compared to 43% for a new one,” says Ulrike Pommee, spokesperson for Belfius. Repayment terms are also becoming longer. In 2014, the average duration was 47 months compared to 49 months in 2019 for a used car. For a new car, the average loan term has increased from 58 to 60 months.
Still, according to Belfius statistics, the average age of the borrower is 47 years for a new car and 39 for a used car. Young people under the age of 30 account for nearly one borrower in three (31%) for a used car, and one in seven for a new car.
Benefits for greener cars
After a steady decline in recent years, borrowing rates for new cars are very slightly rising. They fell from 3,05% in 2013 to 0,80% in 2019. By the end of February 2020, it will rise to 0,99%.
However, banks often propose a lower rate for eco-friendly cars. “0,80% for electric cars, plug-in hybrids, or cars running on natural gas or hydrogen, regardless of the term of the loan,” says Pommee.
In addition to the lower interest rate, this ‘eco’ loan also allows customers to borrow up to 120% of the purchase price to cover any additional costs linked to this change. This can be, for example, the installation of an electric recharging station or photovoltaic panels.