In 2025, tax rules relating to the provision of a company car have changed, leading employees to consider whether or not to retain this fringe benefit.

“Since last year, the benefit-in-kind rate has remained at 0.5% or 0.6% for fully electric vehicles, depending on the models’ energy consumption. For other engine types, it has risen to 2%,” explains Christophe Balthazar, Sales Director at Arval Luxembourg. “In light of these changes, our customers have been doing the maths again to see whether using a company car – and, more generally, operational leasing – is more or less advantageous than buying a car privately.”

Consider the costs beyond the purchase price

The answer to this question is not necessarily obvious and requires taking numerous factors into account. “Often, buyers are aware of a car’s purchase price but are unaware of the actual month-to-month cost, taking into account unforeseen expenses, maintenance, depreciation, and so on,” says Christophe Balthazar.

Opting for a company car under an operational lease offers a clear and straightforward solution that covers, in addition to the cost of financing, maintenance and repairs associated with normal use of the vehicle, insurance, legal protection, tyres and their seasonal changes, as well as taxes. Furthermore, by opting for a long-term leasing service, customers can benefit from preferential pricing terms on purchase, thanks to the negotiating power of a provider such as Arval with manufacturers and distributors.

Comfort and peace of mind

“Beyond the costs associated with use, leasing offers users convenience and peace of mind. In a changing car market, with the evolution of electric vehicle technology, this is now a factor that should not be underestimated,” explains Christophe Balthazar. “It is currently difficult, at the time of purchase, to determine how the vehicle’s value will change. With leasing, the user doesn’t have to worry about this, nor about the processes involved in resale. It is both convenient and very reassuring. This argument strongly favours leasing for company cars.”

Seek expert advice

Keen to challenge the common misconception that operational leasing is always more expensive than buying a private car, Arval Luxembourg has launched an information and comparison website that anyone can visit at avantages.arval.lu.

Depending on the engine type chosen, the model and the lease terms, costs can vary significantly. Seeking advice from an industry professional can help you secure the best possible terms. “The monthly payment depends on a number of factors, including the estimated resale value at the end of the contract,” continues Christophe Balthazar. “The lease payment for a newer model may be more attractive than for an older one, simply because the vehicle will command a higher resale value. The advice and guidance that car leasing professionals can provide is therefore very valuable.”

Use takes precedence over ownership

Generally speaking, operating leases are a response to emerging consumer trends, which favour usage over ownership and are becoming increasingly prevalent in the market. “For the user, this arrangement offers a high degree of cost predictability,” concludes the sales director.

For all these reasons, leasing remains an attractive option and is particularly popular with those who have already tried it. The positive results Arval achieved at the latest Autofestival are proof of this. In a rapidly changing market, the question is no longer simply about owning a vehicle, but about how to access one in the most flexible way possible.

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