Borrowing money, costs money

AFM: private lease must also be justified

AFM private lease must be justified

May 28, 2020

Private lease. It seems like such a great solution if you want to purchase a product for which you do not have enough money. Instead of buying a car, washing machine, laptop or piano, you take out a subscription. But is that solution really that nice?

You can usually cancel a subscription to the newspaper, Spotify or Netflix at short notice if you are no longer able or willing to pay. This is different with private or operational lease of consumer goods such as cars, electronic equipment, furniture and solar panels. Such a lease contract is often not quickly cancellable. For example, a private lease on a car runs for three to five years. If you cancel earlier, you will pay a (hefty) fine.

No loan standards with a lease contract

If you want to borrow money, that is not just possible. The lender wants to know whether you can pay the interest and repayment. That is why borrowing standards have been drawn up on the basis of which it is assessed whether it is responsible for you to borrow. It is important that your income is more than enough to live on and to pay off your loan. Your income, your fixed costs, your personal situation, debts you have and payment problems: it is all taken into account before the light for the loan goes green. But there are no such high standards if you want to buy something on credit or if you want to lease goods.

Expensive leases

The private lease market has become quite popular in recent years and has experienced exponential growth. Not a good development, thinks the Netherlands Authority for the Financial Markets (AFM), which supervises the behavior of the financial markets: saving, investing, insurance and borrowing. This regulator fears that consumers are insufficiently protected against the financial consequences of a lease contract. Because some lease agreements are so expensive that affordability can be questioned. For example, someone who leases a washing machine for ten years is much more expensive than if he were to take out a loan with a term of ten years. Customers in vulnerable situations in particular can be duped with a lease contract.

Private lease under the supervision of the AFM

In order to better protect consumers, the AFM is now asking the Minister of Finance to place private lease under their supervision, just like consumer credit. Because strict loan standards should apply to private leases just as well as to consumer credit. If that happens, you can only conclude a lease if your income allows it. And (long-term) lease contracts are then registered with the BKR. The costs of a private lease may then not exceed a certain maximum and must be made clear to you in advance. Finally, the way in which private lease is advertised would be regulated.

Leasing or borrowing?

Until then, you as a consumer have to decide for yourself whether you are entering into a lease contract and calculate how much money you will spend on it. Do you have doubts between borrowing and leasing? We are happy to advise you and make a clear calculation so that you can see for yourself what is the better choice in your situations.

Moneyou stops

Moneyou disappears from the Netherlands. Switch to another lender

August 14, 2020
Maximum interest rate down to 10 percent

Maximum credit compensation per August 10 to 10%

August 3, 2020
Nationale Nederlanden will stop using Continuous Credit

Nationale-Nederlanden will stop using Continuous Credit

June 29, 2020

Benefit now from the lowest interest ever.
From 3.5% fixed interest at

Request a quote Request quote