Auto Show Guide: Choosing Electric or Hybrid and the Best Financing Options

Before you visit the Auto Show in the coming days, it's wise to do some preparation. Which car suits you best, and how will you finance it? Keep in mind that different rules apply to self-employed individuals than to private individuals.

If you're looking for a new car, you can visit the Brussels Motor Show at the Heysel (Heizel) until Sunday, January 18th. As always, exhibitors are offering discounts on the cars on display.

But before you go, there are a few things you should know. Whether you're buying a car as a private individual or as a self-employed person, it's important to know what type of car you can choose, what financing options are available, and whether you're eligible for tax deductions.

What type of car should you choose?

"Whatever car you choose, you'll no longer be able to avoid electric driving," says Gert Verhoeven, a car expert at VAB. "It's either electric cars or hybrids. Cars that run purely on fossil fuels are being phased out." According to a study by Testaankoop, there are eight electric models that cost less than €25.000.

If you're not willing to buy a fully electric car because of the high cost or because you can't install a charging station, a hybrid car could be a solution. Some hybrids don't require a charging station, such as mild hybrid vehicles that combine a gasoline engine with a battery that recharges itself, for example, when you brake. "Think of the Toyota Corolla hybrid. These are very fuel-efficient cars, even though they're not fully electric. This is convenient for people who can't charge their car, because they don't need to be charged externally," says Verhoeven.

You can also opt for a plug-in hybrid, which requires recharging the battery. "The big advantage of these cars is that you can drive on gasoline when the battery is empty. You can cover about 800 kilometers with the combustion engine and drive 50 to 100 kilometers purely on electric power," says Verhoeven.

There's a downside, however. "Because the cars have two drivetrains, they weigh more. And therefore, they consume more. Although gasoline consumption is much lower than a few years ago, these cars' electricity consumption is much higher than that of a fully electric car."

If you really want to be innovative, you can opt for a fully electric car, although these are known to be expensive to buy. "The range of affordable electric cars has increased. The number of electric cars around €40.000 has grown," says Verhoeven.

If that's too expensive, there are alternatives around €25.000. According to a study by consumer organization Testaankoop, there are eight models on the market that cost less than €25.000. "But these are small cars, like the Renault 5 or the Hyundai Inster. They're comparable to a Volkswagen Polo. Anyone who's always driven an Opel Astra or a Ford Focus will have to dig deeper to buy a comparable electric model."

However, electric car owners pay less road tax. The annual road tax is calculated based on the taxable horsepower. Electric cars generally fall into the lowest tax bracket.

How do you finance your car?

If you've been saving for your dream car for the past few years, you can choose to pay for your new car entirely in cash. But in most cases, a traditional car loan is chosen from a sofa.

As every year we offer couches during the Motor Show, offered discounts on the interest on their car loans.

Last year, during the Motor Show, you could take out loans with interest rates ranging from 3,25 to 3,59 percent. This year, you can do so for less than 3 percent, with rates (known so far) ranging from 2,95 to 3,50 percent, slightly lower. The price breakers are Belfius and BNP Paribas Fortis, which are below the 3 percent threshold for those who want to borrow to buy an eco-friendly car. It's important to know that borrowing for an eco-friendly car can be more advantageous than for a more polluting gasoline or diesel model.

This year, ING Belgium is introducing a personalized rate. "This will be based on the customer's risk profile, the type of car, and its age," says spokesperson Daphne Poets.

The rate isn't the only factor to consider when taking out a car loan. Terms and loan amounts also vary from bank to bank.

Some banks also offer the option of borrowing more than the car's purchase price (up to 125% at Argenta) to finance additional costs, such as insurance, taxes, charging stations, or solar panels. Other banks limit the loan amount (to 85% at the small Walloon bank CPH). As a result, you must finance 15 percent of the purchase price yourself to benefit from these banks' promotional rates.

You can also take out a loan directly through the car dealer. During the Auto Show, dealers offer discounts not only on the price but also on the financing interest rate.

Some dealers offer balloon loans, for those who prefer low monthly payments and a higher final payment. You have several options for this final payment. You can keep the car and choose to pay the remaining balance (the balloon) all at once or repay it with a traditional loan. Or the dealer will take your car back. This return comes with conditions, such as a maximum mileage limit and regular maintenance at the dealership.

In recent years, private individuals have also been offered the opportunity to lease a car and this is becoming increasingly popular.

"Some banks, just like with a mortgage, require that a portion of the car's price be contributed. Those who cannot or do not want to do this usually have no other choice than to fall back on two loans. A balloon