Leasing a youngtimer is becoming increasingly popular

17 augustus 2021

Many people think that entrepreneurs lease a brand new car en masse, but actually nothing could be further from the truth. Nowadays it is very popular to lease a youngtimer as a business car: that is a car that is at least fifteen years old. One of the reasons for this is that a youngtimer is financially very attractive. Below we explain how that works.

What is a youngtimer?

If a car is younger than forty years but older than fifteen years, the car is also called a 'youngtimer'. This means it is neither an oldtimer nor a new car. So you can drive a sporty Range Rover from 2002 for little money. These types of cars are very attractive to lease because it is very advantageous from a tax perspective. Discover the tax benefits below.

Advantages

1. Lower additional tax

When leasing a youngtimer, you pay additional tax on the current value of the car, instead of the list value. However, this additional tax percentage is slightly higher than for a new car: this is 35 percent instead of 22 percent. Fortunately, this is often still cheaper because the current value of an old car is simply low. Self-employed people in particular choose a youngtimer, because they usually also use their car for private purposes. Since you can deduct business kilometers from your income, you can drive a youngtimer relatively cheaply.

2. Less depreciation

A youngtimer will have much less depreciation than a new car. This is the annual depreciation of a car. When you have a new car transferred into your name, it will immediately be worth much less. At that point, the car is no longer new and you therefore immediately lose a large part of your investment. That's a waste of your money. However, this is not the case with a youngtimer. It retains approximately the same value as when you purchased it: old cars simply depreciate a lot less.

3. VAT

If you are liable for VAT as an entrepreneur, you must deduct the VAT you pay on business expenses from the VAT you charge yourself. If you are also going to use your lease car privately, you must pay the VAT in advance. This is about 2.7 percent of the list value of the car. Fortunately, a different percentage applies to most entrepreneurs with a youngtimer. If you have not been able to deduct VAT for your youngtimer, for example because the car was previously owned by a private individual, you only pay 1.5 percent VAT on private use. That saves a lot of money.

Cons

1. More fuel costs

A youngtimer is very popular for its tax benefits. However, leasing a youngtimer also has a disadvantage: old cars are generally not as economical as a new car. Nowadays, the engines in new cars have had a significant upgrade, unlike the engines in youngtimers. This does mean that the new cars have also become a lot heavier. Perhaps the costs can still outweigh each other.