Buying a new car?

Jun 5, 2019 | Tax | 1 comment

The youngtimer arrangement is meant for entrepreneurs, so also suitable for a zzp'er. In this article we explain how this scheme works and which cars are suitable to buy as youngtimer and what you should pay attention to. We also explain how to calculate the additional tax liability and we highlight a number of popular youngtimer models of Volvo, BMW and Mercedes.  

Table of contents. 

Youngtimer scheme for entrepreneurs

A youngtimer is a car that has been registered at least 15 years ago. So if a car is registered on 1-6-2004, it is a youngtimer from 1-6-2019.

The tax authority describes it as follows: 

The value of the car forms the basis for the set-off of the private use. The value of the car is the original catalogue value including VAT and BPM, and including the accessories that have been fitted by or on behalf of the manufacturer or the importer prior to the granting of the car registration number.
For most cars, the list price can be found on the RDW website.

 

Cars older than 15 years

If a car is older than 15 years, the market value (daily value) applies from that moment on. For these old cars, the list price is not important. For example, if a car turns 15 on 1 May, the first 4 months are based on the list price including VAT and BPM and the remaining months on the market value.

The advantage of this scheme is that an additional 35% tax is calculated on the daily value. In most cases, this results in a negligible additional tax liability and all costs incurred for the vehicle (road tax/maintenance/insurance/fuel) can be deducted from the profit and the VAT can be reclaimed.    

How to calculate the daily value of your vehicle 

So if a car is older than 15 years, entrepreneurs may use it as a youngtimer. An addition of 35% is paid over the daily value of the car. So suppose that a car is on the books for five thousand euro, then 5000 * 0.35 = 1750, - euro is added to the income. Compared to a new car, on which often an addition of 25% has to be paid, this is very advantageous.

The Daily Value 

Determining the current value of a car is not that simple; with these types of cars, emotion often plays a part in determining the asking price. If, for example, you are looking for a BMW 5 series type e-39, these are offered from €1000,- and for a car in concours condition you will easily pay €5000,-. That is why it is wise to include the purchase invoice in the accounts. By doing this you can prove later on what amount you paid for the car. If you decide to buy a youngtimer from a private person, it is wise to draw up a sales/purchasing agreement yourself. The ANWB has drawn up one that is good to use. Click on the link to download it directly - sales contract-used-motor vehicle      

Youngtimer road tax

The road tax (MRB) for a yountimer is the same as for any other car, with the exception of true classics (old timers) that no longer pay MRB. These vehicles are older than 40 years and therefore don't pay any tax anymore. When you buy a youngtimer you are always obliged to pay roadtax according to the weight and type of fuel. In the overview below you can see the MRB rate of the province Utrecht (there are small differences between the provinces).

Road tax MRB province of Utrecht

Youngtimer and insurance

It is possible to take out a regular insurance for a youngtimer. The premium depends on the number of years without claims, your age, the number of kilometres you drive per year, the type of fuel and the make/model of car.
But if, for example, you have imported a yountimer in very nice condition with low mileage, the daily value gives a distorted picture. In this case the appraised value would give a better idea of the value. This is why there are so-called yountimer insurances, which are based on the assessed value instead of the current market value. So pay attention to how the insurer calculates the value of your car.   

Buy a new car

Now that you know exactly what a youngtimer is, how the insurance works and what amount you have to pay for the MRB, let's go over to the buying process. Of course there are many models and brands that can be used as a youngtimer, as long as they are older than 15 years. In the next paragraphs we will discuss brands and models specifically, but first a few general guidelines not related to brand and model: 

The mileage 

If it is a Dutch car, you can check the odometer reading with the NAP (Nationale Auto Pas). Every time the car has been to the garage, the odometer reading is stored in a database. These readings must be logical, otherwise the conclusion can be drawn that the odometer has been turned back. In some cases a mechanic has made a mistake when entering an odometer reading, but this can be clearly seen in the counter report.  
If you are looking for a diesel, high mileage need not be an objection. The diesels from the beginning of this century are very strong. The bodywork of these diesels will wear out sooner than the engine. There are a few bad apples, these are the small diesels from Renault, the 1.5 DCI, this was also used in the Volvo v50 1.6D and a few other models from Citroen and Peugeot. The problem with this engine was the small amount of oil that fits in the crankcase, 3.5 litres (normally this is a litre more). If the oil in these engines was not changed exactly according to the maintenance schedule, the turbo would suffer. This is a reasonably expensive repair, so if you have your eye on a car with this type of engine, at least make sure that the oil has been changed according to the schedule. 

The timing belt 

The timing belt drives the valves, the camshaft and the crankshaft, this belt must be replaced periodically. Depending on the model, it is an expensive maintenance, if the water pump is also replaced it will cost around six hundred euros. It is therefore wise to check when this belt has been replaced, click here for the intervals. There are also a few brands that almost always use a timing chain and they almost never need to be replaced. BMW and Mercedes almost always have a timing chain. 

The coupling

The clutch is another thing to look out for during a test drive. If the clutch is slipping, it needs to be replaced and this is also a costly repair. There are several ways to find out if the clutch is still in good condition. The first and simplest method is to feel how far the clutch pedal engages. If the clutch engages late, it may be worn. Another method is to fully depress the accelerator at a constant speed, if the car is revving but not accelerating, this also often indicates a worn clutch. 
Related to the clutch is the flywheel. A flywheel helps the engine of the car to rotate smoothly. Besides a regularly running engine, a flywheel prevents mechanical wear of the clutch, gearbox and drive shafts. When a flywheel is worn out, you will mostly notice this immediately after starting the car. The car then starts to shake and sometimes you hear a scraping sound. In general, the flywheel lasts much longer than the clutch. 

Tyres and brakes 

Tyres and brakes are, of course, vitally important and should always be in good technical condition. However, worn tyres and brakes are not necessarily a reason not to buy a car. These days, you can buy new disc brakes and pads for less than a hundred euros. A reputable garage should be able to fit these new parts within an hour. The same goes for tyres. A mid-range tyre costs around fifty euros, so these costs can be kept down. 

The bodywork of a car

Although the bodywork of cars is treated better and better, rust can still be annoying, both technically and aesthetically. In particular, rust on the subframe or sills can prevent the car from passing the MOT. That's why it's wise when buying a youngtimer to also look under the car and inspect the edges under the doors for rust. Some brands like Mercedes have a lot of trouble with rust. These problems lasted until 2006, after that it got significantly better, but a car from 2006 is of course not a yountimer yet. Volvo's and Audi's have a lot less trouble with the brown monster. With BMWs there is a less clear line to discover, some 5 series don't suffer from it at all, but with others there are many blisters and starting rust spots around the wings. When you look at French youngtimer cars, most of the time the rust is not that bad. In the beginning of this century for example Peugeot had corrosion under control. 

Cars with a history of damage    

If you do not have a trained eye, it can be difficult to recognise past damage. You can often tell by small colour differences in the paintwork and seams that don't quite line up. It must be said, however, that if the damage has been professionally repaired, this is no reason not to buy the car. 
It is also possible to request a damage report, but the RDW is of the opinion that damage is not always reported. The RDW writes the following: 

22 June 2018 - As from 1 July 2018, RDW will no longer offer the current WOK status in the open vehicle data. By doing so, the RDW wants to prevent that the history of WOK statuses is used to show the damage history of a vehicle. By collecting damage information in this way, the consumer is misled.  

Read the full message on the RDW website - https://www.rdw.nl/over-rdw/nieuws/2018/wok-status-niet-meer-in-open-voertuigdata

So tracing damage is not that simple. If you really want to be sure that your car-to-be has not had any damage, it is best to have an independent purchase inspection. 

Importing a new car 

If you want to import a youngtimer from for example Germany, you have much more choice. Beside the larger offer, the mileage of diesels in Germany is often lower. This is because the difference in road tax between petrol and diesel is much smaller in Germany. It is therefore much more profitable for Germans to buy a diesel car.  
The BPM you have to pay when importing a youngtimer is negligible because it decreases every year. After 15 years you pay only a few percent of the original BPM amount. 
Autoweek has developed a handy tool to calculate the residual BPM: https://www.autoweek.nl/bpmcalculator/

Of course there are some disadvantages to importing a youngtimer and the most important one is perhaps time. If you are looking for a 15 year old car, chances are that you will have to look at several examples before you have found one that fully meets your requirements. If you have to drive to Germany all the time, it can end up being an expensive exercise. 
In addition, communication can be a problem and not all private individuals want to have their car exported because they are not familiar with it. 

Retrieved from autoscout24 you can view offers of youngtimers in Germany, the link is a search for BMW 5-series from 2001 to 2005.  

Youngtimer leasing

Leasing is on the rise thanks to the many private lease providers. Leasing a youngtimer is possible, but it is a financial lease contract. This means that only the purchase price is financed and you are responsible for maintenance, MRB and insurance. We have not yet come across a full operational lease construction. Of course there can be a lot of problems with a youngtimer that makes it difficult or impossible to determine a monthly lease amount. On the other hand you can find a perfect youngtimer for around 5.000 euro, so leasing is not necessary in most cases.    

Volvo as a Youngtimer 

Volvo v70 youngtimer R

A Volvo is a popular youngtimer. This is due to its reliable and safe image. From 2000 on there are several models that qualify as a youngtimer, whereby the V70 is the most popular model.
This model is known as very reliable and comes with both petrol, diesel and LPG engines. The 2.4 petrol variant is also used in the LPG variants and has no major problems. The consumption of this petrol engine in the variant without turbo is acceptable, 1:11/12. If you choose an automatic, you can deduct one kilometre per litre. 
The well-known D5 diesel is an excellent 5 cylinder common rail diesel. This engine combines economical consumption with a lot of power and does its work very civilised without being noisy, absolutely recommended. The consumption of the D5 with an automatic is about 1:15/16, with a manual you can even get an average of 1:18, not bad for a car of over 1500 kg. This is perhaps also the disadvantage of this car, it is heavy and if you choose diesel, the road tax is unpleasantly high. You will have to drive a lot of kilometres to justify a diesel.   

Another model that people don't readily think of is the V40 Phase 2 from 2001 to 2004. This Volvo, produced in the Netherlands, is very reliable, drives pleasantly and is economical. The 1.9 diesels in this model come from Renault (DCI) and are very reliable. In addition, the consumption of this diesel is very pleasant, 1:18/19 is easily achievable. This type of diesel also has a common rail system, but is not as refined as the D5. This is especially noticeable when accelerating, they just make a bit more noise, but on the motorway this does not bother you. They are almost always equipped with cruise control, climate control, airbags all round, electric windows and mirrors. If you are looking for this type, try to get a Sport. These look great with the 17 inch arcadia rims, side skirts and black grill looks more modern. 

Of course, there are more Volvo models that qualify as yountimers. The S80 for example, a true limousine that had to compete with the big Germans of the time. However, this model has a few more problems than the V70 and the interior is less wear-resistant, which in our eyes makes it less suitable as a youngtimer. The S60 is the S80's little brother and has a slightly sportier appearance. The quality is comparable to that of the V70, the only disadvantage of the S60 is its weight. This smaller model weighs almost as much as a V70 and S80 and therefore has a similar consumption. The engines are very similar, although the S80 also came with two 6-cylinders, the T6 and the 2.9. 
Finally, the V50 and its sedan variant, the S40, can now also be used as youngtimers. These models are built on the platform of the Ford Focus of that time and handle very well. They are not very roomy and some people don't like the interior, but this is purely personal of course. Most engines delivered in these models are very reliable, except for the 1.6 D, as written before, this engine has a too small oil reservoir which causes the turbo's to break down sometimes. The 2.0D with the 6-speed manual gearbox is a lot more reliable and has therefore our preference to function as a youngtimer.      

BMW as a Youngtimer

BMW 5 Series e39 Youngtimer

BMW is the best-selling brand in the Netherlands within the high-end segment, selling over 20 000 cars in 2018. Mercedes and Audi sold significantly fewer cars in 2018. BMW owes this popularity to its driving characteristics and excellent engines. Although no sales figures are known specifically for youngtimers, the brand is also immensely popular in this segment. 

The 5 Series and especially the e39 model is often used as a yountimer. This 5-series sometimes gets the title "best 5-series ever built", thanks to its excellent chassis (sporty/comfortable) and the fine 6 cylinders. With this model, it is advisable to go for the facelift type from 2000. These have a less dated interior, and are less prone to rust. The engine range is wide, the 530d common rail is fast, economical and quiet, so a must. The 525d is also an excellent engine for this car. The 520d with manual transmission and 136 hp is not a streak puller, but it is extremely economical, with this car 1:18/19 is easily achievable. The petrol versions start with the 520 and are all 6 cylinders. There are also three 8-cylinders, 535, 540 and the M5. The e39 is known to be reliable and the diesels can do extremely high mileage. Problems we are aware of are related to the cooling system. With diesels, the injectors sometimes deteriorate with age. This can be recognised by the development of smoke, especially during a cold start. The successor to the e39, the e60 has more electronic problems and is therefore not preferred.  

If you want a size smaller, you'll end up with the e46At the beginning of this century, this 3 Series was immensely popular, and not without reason. The chassis is a good mix of sporty and comfortable, and the engines are reliable and economical. The e46 was available in several bodywork variations, whereby the coupe was the most successful, in our opinion. The compact model is a bit of an oddity; many people don't like the design, but this is a matter of personal taste. The biggest problem with this three series is rust. When they come of age, the mudguards and sills often rust. 

Besides the models mentioned above, 7 series and X5 models are also sometimes used as youngtimers. The disadvantage of these models is the user costs. Both a 7-series and an X5 are quite thirsty. An X5 3.0d consumes easily 1:11/12 and the MRB is high so the advantage of the yountimer arrangement disappears like snow in the sun.    

Mercedes as a Youngtimer

Mercedes e class as a Youngtimer

A Mercedes is also often used as a youngtimer. Mercedes models are reliable and come with many different engines. The chassis are well balanced and tend more towards comfort than sportiness. The (W203) C-class is a popular youngtimer. This model was introduced in July 2000 and was available in petrol and diesel versions with both 4 and 6 cylinder engines. Mercedes supplied the 4 cylinder petrol with and without a compressor; the variants with a compressor are just a bit smoother and not less economical, and are therefore preferred. The diesels were marketed under the name CDI, these common rail diesels are very reliable. However, they are less fast and economical than the diesels of BMW. The only major disadvantage of the W203 is rust. This model suffers from an extreme amount of rust around the mudguards. If you come across a car that has no rust, it has probably already been treated once and you will probably have to repeat this a few times in the coming years. Other problems to watch out for are: 

1. Valeo radiators:
   If it is dying, these symptoms are noticeable; a droning / humming noise at around 1200 - 2500 rpm, as well as a jolt when accelerating carefully.
2. SAM module (signal acquisition module):
   A faulty SAM can cause a huge electrical headache. Symptoms can include: fuel gauge not working, lights not working, constantly snapping fuses, problems with the keys not charging, rear lights staying on, dashboard buttons not responding. Very annoying of course. The cost of a new module is around €250.
3. Front suspension rubbers:
   The rubbers in the front train wear out more than average. This can be recognised when driving over a speed bump. A "clunk" sound can be heard.
4. Oil in wiring/ECU: This occurs sporadically, but can cause major problems. If the cylinder head sweetens, oil can get into the ECU which in turn causes problems with the MAF. So make sure that the Mercedes doesn't have oil near the cylinder head. It is advisable to remove the engine cover, otherwise you won't see anything. 

The E-Class is also a popular youngtimer, the W210 which was produced between 1996 - 2002 is disappearing from the streetscape, because many have been exported. Its successor the W211 was introduced in 2003 and is now a youngtimer. The W211 is a real mile-eater and the driving characteristics are mainly tuned to comfort. This Mercedes is supplied with a wide range of engines, whereby the lightest engine is a 1.8 compressor with 163 hp. Despite its modest capacity, this engine is pretty quick; with the manual gearbox it does the 0-100 km/h sprint in under 10 seconds and the top speed is an impressive 230 km/h. The consumption is reasonable with 1:11/12. 
Fortunately, the W211 suffers a lot less from rust than its predecessor. Some other problems that do occur are: 

1. Air suspension (usually rear wheel suspension) 
   The air pockets may leak air, causing one side to lower slightly. If the car has been standing still for a longer period of time, the car may lower until the car is started again. If the car does not rise, this may indicate that there is a problem with the pump and/or air bags. 
2. SBC pump (Sensotronic brake control)
   It is a great innovative invention by Mercedes Benz, but can cause expensive repairs. Problems usually occur between 200,000 and 300,000 pedal strokes. If the SBC pump has been replaced, there should be a yellow label and a date on the part. Be careful if this part is older than 10 years or has never been replaced!
3. Valeo Radiator
   A faulty Valeo Radiator is not an expensive part to replace, but if it is not repaired, it can lead to expensive repairs. An important consequence would be a defective Valeo leaking Glycol in the transmission! So pay attention to whether it has already been replaced and what its general condition is.