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Leasing a car in Luxembourg before buying it
Are you thinking of buying a car? Don't rush and before buying, try leasing one. This option allows you to rent a car for longer periods of time and sometimes it can be even more interesting. Keep reading and we will tell you everything you need to know about it.
If you don't like the idea of paying a value close to the payments on a loan for several years and then having to return the car at the end of the contract, keep in mind that some leasing contracts allow you to purchase the car for an additional amount at the end of the contract.
What is car leasing in Luxembourg?
Car leasing in Luxembourg involves entering into a medium to long-term rental contract for a vehicle, often with the option to purchase the car at the end of the lease by paying the residual value. This type of contract allows drivers to enjoy a new car for an all-inclusive rental price, typically excluding insurance, at a cost generally lower than the depreciation of a car loan.
The process of leasing a car in Luxembourg typically follows these steps:
- Choosing the vehicle.
Select the car brand and details, including the model, engine type, options, color, and more.
- Evaluating offers.
Compare leasing deals from car manufacturers, specialized leasing companies, and online platforms that aggregate offers from different providers.
- Deciding the duration.
Lease contracts usually range from 2 to 4 years, but longer leases are also available.
- Checking the initial payment.
Some leases include an initial payment, which can be adjusted. Generally, a higher initial payment results in lower monthly payments.
- Estimating annual mileage/
Estimate the number of kilometers you plan to drive annually. Accurate estimation is crucial as extra kilometers often incur high costs. Contracts typically start from 10,000 km per year.
- Choosing the contract type.
Leasing with an Option to Purchase (LOA) and Long-Term Rental (LTR) are the two main types of leasing contracts. LOA allows you to buy the car at the end of the lease, while LTR does not.
- Reviewing contract details.
Carefully check all contract details, such as maintenance conditions, the possibility of extending the lease, and other terms.
- Signing the contract.
Once the contract is reviewed, sign it and make any required initial payment. Then, receive the vehicle, ensuring it is in optimal condition.
- Getting insurance.
You are free to choose your insurance provider, but the leasing company will typically require proof of comprehensive insurance (CASCO).
- Returning the vehicle at the end of the lease.
You must return the vehicle at the end of the contract.
While both car leasing and short-term car rentals allow you to drive a vehicle without owning it, there are several key differences.
| Service | Car rent | Car leasing |
| Contract duration | Days to weeks | Months to years (typically 2-4 years) |
| Options at the end of the contract | Return of vehicle | Return, purchase of the vehicle, or renewal of the contract |
| Monthly payments | Generally higher | Generally lower than a purchase loan |
| Insurance and maintenance included | Included | Not included |
| Penalties | Minor, generally related to damage or cleaning | Excessive mileage, excessive wear and tear, early termination. |
Carsharing and ridesharing in Luxembourg
Read articlePros and cons of car leasing
Car leasing offers several advantages and disadvantages that are important to consider before deciding if it's the right option for you.
What to consider?
Monthly payments are typically lower compared to a loan for purchasing a vehicle, as you are only paying for the use of the car during the lease period, not its full value.
Leasing allows you to drive new vehicles with the latest technology and safety features, enhancing your driving experience and road safety.
New cars depreciate the most in the first few years. With leasing, you don't have to worry about the vehicle losing value since you don't own it.
Lease contracts usually require a lower down payment compared to buying a car, freeing up capital for other uses.
Fixed monthly payments make budgeting easier, particularly for businesses and freelancers.
Some leasing contracts include services such as insurance, maintenance, and roadside assistance, although these should be verified when signing the contract.
At the end of the lease, you can return the vehicle, purchase it at a pre-agreed price, or start a new lease contract.
You do not own the vehicle during the lease period and will never own it unless you opt to buy it at the end of the contract.
Lease contracts typically come with an annual mileage limit. Exceeding this limit can result in significant additional charges.
You may face extra charges for excessive wear and tear beyond what is considered normal.
Although monthly payments are lower, leasing can be more expensive in the long run compared to buying and keeping a vehicle for many years.
Leasing contracts are difficult to terminate early without incurring substantial penalties, which can limit your flexibility if your needs change.
Leased vehicles usually require comprehensive insurance (CASCO), which can add to the overall cost of leasing.
In the event of theft or damage to the leased car, you are typically required to continue making lease payments.
Leasing is an interesting option, but it all depends on your preferences and needs, while for some it may be useful, for others with different needs it may be better to buy an auto outright. It is important to see how leasing fits your needs.
How much does it cost to lease a car in Luxembourg: average calculations
If you're considering auto leasing, one of the most important questions you're likely to ask yourself is: how much does it cost? The cost of leasing a vehicle can vary quite a bit, and it depends on several factors. Here are the most important ones.
Vehicle model
The brand and model of the car play a significant role in determining the lease cost. Luxury and high-performance vehicles generally have higher monthly payments compared to standard models.
Special options
The specific options and features selected for the car, such as advanced comfort packages, premium sound systems, or high-end interior materials, can increase the lease cost.
Lease duration
The length of the lease contract affects the monthly cost. Typically, shorter lease terms have higher monthly payments, while longer terms can offer lower payments.
Annual mileage allowance
The estimated number of kilometers you plan to drive each year impacts the lease price. Contracts with higher mileage allowances will usually have higher monthly fees.
Down payment
The initial payment made at the start of the lease can influence the monthly costs. A higher down payment typically reduces the monthly fee.
Included services
Additional services included in the lease contract, such as maintenance, roadside assistance, and insurance, can increase the overall cost. However, these services can provide peace of mind and convenience.
Residual value
The predicted value of the car at the end of the lease term (residual value) affects the monthly payments. Cars with higher residual values often have lower monthly lease payments.
Promotions and discounts
Special offers, promotions, and discounts from manufacturers or leasing companies can significantly reduce the cost of leasing a car.
Show all
In order to give you an idea of how much it can cost, here are some examples. For ease of comparison, we have chosen offers with no special features and no down payment.
| Vehicle | Leasing period (years) | Km included per year | Monthly Payment (euros) |
| Peugeot 208 II | 2 | 10,000 | 279 |
| Renault Clio 5 | 2 | 10,000 | 382 |
| Volkswagen golf VIII | 4 | 10,000 | 428 |
| Tesla Model 3 Propulsion | 5 | 10,000 | 579 |
| Audi A4 Avant | 3 | 20,000 | 641 |
| Lexus UX | 2 | 40,000 | 843 |
Top companies to lease a car in Luxembourg
As you probably don't even know where to start looking, we are going to introduce you to some of the main companies with which you can arrange car leasing in Luxembourg.
VWLFS Luxembourg
Open in 8:00Closed in 17:00
Operating in 50 countries worldwide, Volkswagen Financial Services is the financial services arm of the Volkswagen Group, encompassing all financial activities related to automobiles globally. It currently stands as the leading automotive financial services provider in Europe and the second-largest globally.
MON — FRI
08:00 – 17:00
SAT — SUN
Closed
To obtain information about a lasing it is necessary to contact them through their website or to contact one of their dealers.
Volkswagen Financial Services offers leasing contracts tailored for both individuals and businesses, featuring a wide selection of vehicles from the Volkswagen Group's portfolio of brands: Volkswagen, Audi, SEAT, CUPRA, ŠKODA, Porsche, Lamborghini, and Bentley.
To explore leasing options with Volkswagen Financial Services, you can initiate contact by submitting a request through an online form or directly contacting one of their authorized dealerships. Additionally, they provide a limited selection of models available for direct online reservation, though the current offering is modest, with only 2 models available at the time of writing this article.
Online Subscription
Multiple brands, one manufacturer
Multiple locations
Multiple customization options
To give you an idea of the prices, below are the two models available for online reservation along with their base configuration prices:
Header
| Car model | Cost (euros) | Characteristics |
| Škoda, Fabia Monte Carlo | 399 | 36 months, 10 000 km/an |
| Škoda, Kamiq Monte | 536 | 36 months, 10 000 km/an |
Foyer
Open in 8:30Closed in 17:30
Founded in 1922, Foyer is a Luxembourgish insurance company and is currently the leading insurer in the country. They provide a comprehensive range of products including life insurance, health insurance, automobile insurance, home insurance, and notably, car leasing contracts.
MON — FRI
08:30 – 17:30
SAT — SUN
Closed
Subscription through an agent
Maintenance included
Limited choice
Multiple customization options
Their leasing options are limited, Foyer currently offers three models:
Header
| Car model | Cost (euros) | Down payment | Characteristics |
| Mini COUNTRYMAN E Trim Essential | 319 | 3500 | 24 months, 10 000 km/an |
| BMW iX1 Edrive20 | 269 | 5000 | 24 months, 10 000 km/an |
| Polestar 2 Long Range Dual Motor | 240 | 4000 | 24 months, 10 000 km/an |
BGL Luxembourg
Open in 9:00Closed in 16:00
BGL Luxembourg is a leading financial institution in Luxembourg, part of the BNP Paribas group. With a history dating back to 1919, BGL Luxembourg stands out for its strong reputation and comprehensive range of financial services, including retail banking, private banking, insurance, and vehicle leasing.
MON — FRI
09:00 – 16:00
SAT — SUN
Closed
Volkswagen Financial Services offers leasing contracts tailored for both individuals and businesses, featuring a wide selection of vehicles from the Volkswagen Group's portfolio of brands: Volkswagen, Audi, SEAT, CUPRA, ŠKODA, Porsche, Lamborghini, and Bentley.
In the vehicle leasing sector, BGL Luxembourg offers a Private Leasing option that allows access to new vehicles with flexible contracts. This service provides the opportunity to customize the vehicle according to your tastes and needs, with monthly payments covering vehicle use, maintenance and insurance.
Multiple brands, several manufacturers
Subscription through an agent
Maintenance included
Multiple customization options
While some options are displayed on their website, configuring a lease to your specific preferences requires direct contact with BGL Luxembourg, either by phone or through the form on their website.
Below are some of the options currently showcased on their website:
Header
| Car model | Cost (euros) | Characteristics |
| Mini Cooper E | 435 | 60 months, 10 000 km/an |
| Volvo EX30 Core Single Engine | 485 | 60 months, 10 000 km/an |
| Renault Scenic E-Tech Evolution 170ch comfort range | 495 | 60 months, 10 000 km/an |
Spuerkeess Lease Plus
Open in 8:00Closed in 16:00
Spuerkeess, also known as Banque et Caisse d'Epargne de l'Etat, has a history dating back to the early 19th century and is the national savings bank of the Grand Duchy of Luxembourg. As a government agency, its mandatory missions are to stimulate savings, facilitate access to housing and ultimately promote the national economy. Spuerkeess is a globally recognized brand whose financial health is considered to be as good as that of its sole shareholder, the Luxembourg State.
MON — FRI
08:00 – 16:00
SAT — SUN
Closed
To find the closest office to you, visit spuerkeess.lu.
Among the wide range of services offered by Spuerkeess is vehicle leasing through its Lease Plus offer, provided in collaboration with Leasys Luxembourg. The Lease Plus program offers comprehensive coverage, including administrative management, all-inclusive insurance, summer and winter tires, regular maintenance checks, mechanical repairs, and 24/7 roadside assistance.
Multiple brands, several manufacturers
Subscription through an agent
Maintenance included
Multiple customization options
Below are some of their current leasing offers, though you can customize your vehicle to your liking by contacting one of their agents:
Header
| Car model | Cost (euros) | Characteristics |
| Hyundai Kona EV | 299 | 18 months, 15 000 km/an |
| MINI Cooper Electric | 399 | 18 months, 22 500 km/an |
| Citroën ë-C3 | 411 | 60 months, 10 000 km/an |
LALUX Time2Lease
Open in 8:00Closed in 17:00
Lalux is a prominent insurance company in Luxembourg, established in 1920 as the first Luxembourgish insurance company in the Grand Duchy. With over a century of experience, Lalux has cemented its position as one of the leading insurers in the country, offering a wide range of products including life, health, home, automobile, and business insurance.
MON — FRI
08:00 – 17:00
SAT — SUN
Closed
To find the closest office to you, visit lalux.lu.
Volkswagen Financial Services offers leasing contracts tailored for both individuals and businesses, featuring a wide selection of vehicles from the Volkswagen Group's portfolio of brands: Volkswagen, Audi, SEAT, CUPRA, ŠKODA, Porsche, Lamborghini, and Bentley.
In the vehicle leasing sector, Lalux offers its innovative Time2Lease service, designed to provide a comprehensive and hassle-free mobility solution. A key component of this service is the easyPROTECT Auto insurance, which stands out for offering no-deductible solutions in case of an accident, reimbursement of the initial down payment in the event of a total loss, a replacement vehicle, and both national and international assistance.
Multiple brands, several manufacturers
Subscription through an agent
Insurance included
Multiple customization options
Lalux offers a variety of vehicles for leasing, although only five offers are displayed on their website. To explore more options, you would need to contact one of their sales agents. Below are the current offers available on their website:
Header
| Car model | Cost (euros) | Characteristics |
| Cupra Leon 1.5 eTSI 110kW/150ps DSG7 | 529 | 48 months, 15 000 km/an |
| CUPRA Leon 2.0 TDI 110kW/150ch DSG7 | 555 | 48 months, 15 000 km/an |
| Cupra Leon Sportstourer 1.5 eTSI 110kW/150ps DSG7 | 559 | 48 months, 15 000 km/an |
Here we have covered some of the companies that offer leasing contracts, but these are not all of them, there are many more, other relevant companies include Arval Luxembourg, Leasys, Leasing Prive or Easy Lease, among others.
Frequently Asked Questions (FAQ)
What are the main benefits of leasing a car instead of buying one?
Leasing a car offers several benefits, including lower monthly payments compared to a car loan, as you are essentially paying for the car's depreciation during the lease term rather than its full value. It allows you to drive a new vehicle every few years, enjoying the latest technology and safety features. Additionally, maintenance and repair costs can be lower since leased vehicles are typically under warranty. Leasing also provides tax benefits for businesses and avoids the hassle of selling the car at the end of its useful life.
What type of insurance is required for a leased car?
Leased cars usually require comprehensive insurance coverage, including collision and liability insurance. This ensures that both you and the leasing company are protected in case of an accident or damage to the vehicle. The leasing company may have specific minimum coverage requirements that you must meet, and proof of insurance is typically required before taking possession of the vehicle.
Are there any penalties for terminating a lease early?
Yes, terminating a lease early often incurs significant penalties. These can include paying the remaining lease payments, early termination fees, and any negative equity on the vehicle. The exact amount will depend on the terms of your lease agreement. It's important to review and understand these terms before signing the lease to avoid unexpected costs. If you anticipate needing to end the lease early, discuss possible options and penalties with the leasing company upfront.
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Source: axa.lu, economie.gouv.fr, vivacar.fr, vwlfs.lu, foyer.lu, fr.wikipedia.org, bgl.lu, spuerkeess.lu, lb.wikipedia.org, lalux.lu
We took photos from these sources: VWLFS Luxembourg, Foyer, BGL Luxembourg, Superkeess, Lalux, Brock Wegner for Unsplash
Authors: Luz
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