How to find the best rate for your car loan?

Today more than yesterday and probably much less than tomorrow, the car is an integral part of homes in France. Indispensable for millions of citizens, both in urban and rural areas, the latter still lacks a significant budget to dedicate to it, whether for acquisition, use or maintenance.

Since the Covid-19 crisis, vehicle prices, whether new or even used (due to demand exceeding supply), have continued to rise. And with an automotive transition tending towards electrification, not all French families can afford to spend more than €30,000 to buy a small electric city car (and more depending on the type of vehicle) it won’t allow you to reach your holiday destination. Thus, to support and help drivers in the acquisition of this property, there are some means of financing, such as long-term LLD rental, rental with option to purchase LOA or, what interests us today, car credit. We explain how to find the best car loans.

A car loan valid only for the purchase of a new or used car

Even if it seems logical, it is still necessary to remember that a loan or credit car is valid only for the purchase of a carbut above all, it comes with several points to know, and that differentiate it in particular from personal credit.

Indeed, the car loan provides several guarantees to its borrower, such as the cancellation of the loan if the car is not delivered or even the beginning of the loan repayment after the borrower has received the vehicle.

From its other name “assigned credit”, to its allocation to a particular property, car credit can be used both for the purchase of a new and used vehicle (be careful to choose your used vehicle carefully). However, it is capped at €75,000. Important clarification, when the loan is taken out and monthly repayments begin, you will have to pay a higher amount than the borrowed amount. It’s called interest and varies depending on the lenders or credit institutions and the negotiated rate, but also if the vehicle is new or used, and according to the repayment period.

Obviously, thanks to the internet today, it becomes simple and fast to find ways to reduce the amount of your monthly payments thanks to brokers and comparators or online credit simulators that will make proposals and will be able to give examples for the rate according to your profile. .

Compete with comparators to find the best APR interest rate for your financing

If insurance companies and bankers have the art of being good communicators, we should not let ourselves be lulled by beautiful speeches and realize too late that it was possible to benefit from a more advantageous interest rate.

First of all, the best car loan rates rarely go above 3% APR (fixed rate) these days according to the average rates that can be seen on rate barometers, regardless of profile. This allows you to have a good indicator and prevent fraud. The key to your trading is upstream, in your research work.

Also be aware that in addition to the so-called nominal fee (the credit rate itself), you also have other costs, such as policyholder insurance and administrative fees. These application fees can quickly amount to several hundred euros, so they should not be overlooked. As for insurance, the various laws of recent years (in particular the Hamon Law and then the more recent law) have largely relaxed the rules for the benefit of customers. To facilitate the acceptance of the files, you can therefore accept the insurance offered by the bank or the dealer and change it later.

Whether it’s the cost of insurance and administrative fees, these are included in the APR (annual fee). Stopping at just the nominal loan rate would be a mistake, which is why only the APR rate allows you to compare the different loan offers and the total cost of your motorcycle car loan. Be careful when comparing to take into account the requested contribution, as the total cost is calculated according to the amount actually borrowed, as well as the repayment term.

Purchasing a vehicle is rarely done on a whim, unless financial means obviously permit. A high personal contribution will significantly reduce your car loan amount and therefore your monthly payments. Yes, the less certain the banks are of their solvency, the higher the rate. Same thing for the repayment term. A contribution of several thousand euros and a short duration is more reassuring, but you still have to bear current inflation…

Finally, the best interest rates for a car loan are often less important for a new car purchase than for a used vehicle. No more time to waste to carry out your project, your new vehicle is waiting for you as soon as you find your car loan at the best rate! And be careful because currently rates are going up whether it’s for a car loan, a personal loan or a consumer loan.

To definitively sign your credit, you will need to prove your income and identity through an invoice, your payroll, your employment contract, identity document and proof of address. Either way, you’ll have a cooling off period if you change your mind or find a cheaper price elsewhere.

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