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Belgians borrow 17% more from the bank to buy a new car

The repayment terms are becoming longer as well. Credit: Pexels

The amount of money that Belgians borrow from the bank to buy a new car has increased by 17% since 2015, according to figures by Belfius Bank.

On average, Belgians borrowed €15.400 to buy a car in 2019. People took out a loan of €19.200 for a new car, and €12.500 for a used one.

“In 2019, 57% of car loans were for the acquisition of a used car, compared to 43% for a new one,” said Ulrike Pommee, a Belfius spokesperson, reports NewMobility.

The repayment terms are becoming longer as well, with an average duration of 49 months for a used car and 60 months for a new one in 2019, compared to 47 and 58 months in 2015, respectively.

The average age of a person borrowing money to but a new car is 47 years old, and 39 for a used one, according to Belfius’ figures. People under the age of 30 make up about a third of the borrowers for a used car, and about 14% for a new one.

Borrowing rates for new cars are rising very slightly again, after a steady decline in recent years. They fell from 3,05% in 2013 to 0,80% in 2019. However, by the end of February 2020, they will rise again to 0,99%.

Additionally, banks often propose lower rates for eco-friendly cars, as well. “0,80% for electric cars, plug-in hybrids or cars running on natural gas or hydrogen, regardless of the term of the loan,” said Pommee.

The ‘eco’ loan allows customers to borrow up to 120% of the purchase price to cover any additional costs linked to the change from a diesel or petrol car to an electric one, like the installation of a charging station or solar panels, for example.

“The investment a customer makes in such a vehicle is considerable. A cheaper loan can tip the balance sheet,” said Pieter Kussé, a KBC spokesperson, reports De Tijd.

Maïthé Chini
The Brussels Times