When you choose a long-term rental, you entrust the financing and maintenance of your business vehicle to a specialist company. You make fixed monthly lease payments that you know about in advance. The agreement is tailored to you and is drawn up based on your needs and business activities.
What is long-term rental?
It is a solution that consists in using a specialist company, namely Arval Luxembourg, to finance and manage a vehicle. You select the new car you need, the lease term (up to 60 months) and the maximum mileage (based on the model). Services such as maintenance, insurance, road-side assistance, tyres and courtesy cars are included in this type of agreement.
long-term rental is an ideal solution to help you stick to your budget, save time and drive freely, while entrusting the management and financing of your vehicle to a professional.
You have the option to lease any make of new car up to 3.5 tonnes (excluding company cars and Renault group vehicles).
Who is long-term rental aimed at?
For tax reasons relating to this type of contract, only professionals with a Luxembourg VAT number are eligible for this offer.
Does long-term rental offer any tax benefits?
If you are a freelancer or self-employed professional, you can deduct travel costs related to your business as operating expenses. With a long-term lease, your monthly payments will be deductible on a pro rata basis for professional use depending on the specific tax treatment applied by the tax authorities.
NB: Any personal use will not be deductible as operating expenses. It is therefore important to make a distinction between personal travel (non-deductible expense) and business travel (deductible expense) in a logbook for example.
What fees and services are included in a long-term lease agreement?
Arval Luxembourg offers all-inclusive long-term lease agreements (excluding fuel), for which the monthly lease payment covers:
use of the vehicle
servicing and maintenance: routine and ad-hoc servicing, management of mechanical breakdowns, tyres (depending on the agreed mileage), replacement of parts owing to wear and tear and defects
international insurance and assistance: insurance, material damage cover, courtesy car, breakdown cover, towing and repatriation.
Long-term lease agreements are not subject to any application fees.
What is the difference between long-term rental and financial leasing?
Long-term lease agreements are also called operational lease agreements. There is an important difference between them and financial leasing; with financial leasing, you have the option to purchase the car at the end of the agreement term.
Financial leasing is a lease with a purchase option. In other words, at the end of the lease, there is an option to buy the leased car by paying the residual value determined when the agreement was signed. Furthermore, financial leasing does not include operational services, such as servicing, maintenance and assistance, etc.
long-term rental, on the other hand, is not intended to finance a car that could, at the end of the lease, be purchased by the lessor. When the agreement reaches its term, the vehicle therefore remains the property of the lessor, Arval Luxembourg, which is responsible for selling the car on the second-hand market.
The benefit of long-term rental: you have access to a new car, a wide range of services, and personalised follow-up throughout the term of the lease, all for a fixed monthly cost.
Arval Luxembourg will negotiate the purchase price of the car.
How are the monthly lease payments calculated for my car?
The monthly lease amount is defined at the start of your agreement.
It is calculated according to Arval Luxembourg's calculation rules, which take into account the following:
the car's purchase and resale value (residual value)
the agreed term and mileage
Is long-term rental more expensive than buying a vehicle?
long-term rental is just as economical as purchasing a vehicle for medium and large-scale lessors alike because:
There is no impact of a decline in the car's value or a rise in commodity prices or service labour costs in invoices from dealerships.
Use of the car is paid for in the form of a monthly lease payment.
The levelling of costs over the entire term of the lease agreement protects against unexpected financial outlays for major repair and maintenance work.
The purchasing power of the lessee, Arval Luxembourg, makes it possible to obtain better conditions and reduce the cost of vehicles.
You can protect your savings so that they continue to grow or so that they can be used for something other than purchasing a vehicle.
What changes can be made to a long-term lease agreement?
Before signing the agreement, you must choose between:
vehicle makes and models
options and accessories
the agreed term and mileage
During the agreement lifetime, it is possible to change the term and mileage (subject to the maximum authorised term and mileage limits for the vehicle in question) free of charge up to three months before the vehicle is returned. The monthly lease payment will be adjusted accordingly. However, it is important to carefully estimate your mileage when signing the agreement, as, in the event of any excess mileage consumption, an amendment to the agreement will be suggested taking into account a new lease payment and a new mileage allowance.
What condition must the vehicle be in when it is returned at the end of the long-term lease agreement?
A car that is several years old is no longer in the same condition as it was when it was new. However, a distinction must be made between normal wear and tear and damage. If you purchase a second-hand car, you will pay less for a car that has visible scratches and noticeable dents. The same is true of our clients. As such, any unusual damage will decrease the sale price and Arval Luxembourg will invoice you for costs incurred by the fall in value. As a general rule, no repairs are made to minor damage and consequently the invoice amount will be lower.
Arval Luxembourg informs its clients three months before the end of lease agreements and sends a return guide, containing the information required to return the vehicle in the best condition and detailing the state in which it must be returned, with photos provided for guidance.
I am interested in long-term rental. Where can I find out more and how do I apply?
Step 1: Visit your preferred garage* in order to choose your car. Agree on any model specifications you would like with your dealer (options, colours, etc.).
Step 2: Make an appointment at a BGL BNP Paribas branch where our advisors will determine the monthly lease payments on the basis of the vehicle chosen and the agreed term and mileage. Our advisors will then assess your repayment capacity.
Step 3: Once the application is accepted by the Bank and with your consent, it will be transferred to Arval Luxembourg, who, as your long-term rental specialist, will finalise your agreement with you and follow up as required.
*In the Grand Duchy of Luxembourg. The offer does not apply to cars from the Renault group.
Intéressé(e) ? Si vous avez choisi votre future voiture et vous avez déterminé sa configuration avec votre garagiste, il ne vous reste plus qu'à rendez-vous en agence BGL BNP Paribas !