Car loan: instructions for obtaining the best rate
How to get the cheapest car credit possible? Because from one organization to another, there can be big differences. You also need to understand the differences between the used car credit and the new car credit. Here is a manual to get the best rate of auto credit.
Car credit comparison
To get the best car loan rate, there are not 36 solutions, you have to go around the market. It can be tedious but it is the most effective thing. Even if it is regularly “classic” credit organizations like Yoabank or Bankil that offer the best rates , occasionally banks and dealers can be competitive. We therefore propose a method which should make it possible to obtain the best car credit whatever the situation .
IMPORTANT : the proposed credit rate is not the accepted credit rate . Often, financial organizations offer ultra-low rates, but these are generally just commercial hooks on ultra-short repayment terms. Only the best applications will be accepted . So you have to get the best car loan with an agreement in principle. Here is the method we offer:
- Get the best rate from credit specialists
Franfinance, Bankate and others are specialists in consumer loans and in particular car loans. They are the ones who define the market and generally make the lowest offers . To get their best rate, just use our car credit comparator. We suggest ranking the best rates from the largest organizations. But that’s not all. Each file receives an immediate response in principle from the cheapest organization for its request.
- Receive a formal proposal
Obtaining a formal proposal, in the form of a prior credit offer, is not binding but it is essential for negotiating your credit . Through our system, the cheapest organization will send the car loan proposal directly by email and / or by post.
- Negotiate with your bank or dealer
Getting an attractive used car loan proposal from a bank or dealer is almost impossible. For the new, they can make really attractive promotions from time to time. In this case, you must make an appointment and go there with the best offer obtained through our comparison of car credit rates. Either they can do better, or you already have the best deal.
Used car credit
To understand in detail how this type of used car loan works, we recommend reading our article on used car credit. The bottom line is:
- It is generally not necessary to provide proof of purchase of the car.
- The rates are a little higher than for new auto credit.
- The used car loan is a credit without contribution.
- The banks hardly offer it.
- Dealers are very expensive.
Indeed, it is better to know first how much you can put precisely rather than not being able to honor a promise to purchase because of a used car credit refused. It is important to remember that applying for a loan is not engaging . The credit will not be effective until the contract has been signed by the client and the financial organization has validated the supporting documents .
The ideal chronology therefore seems to us:
- Identify the budget necessary for its purchase.
- Apply for a used car credit.
- Obtain an agreement in principle to validate the budget from which we can benefit.
- Find the desired vehicle.
- Return the credit contract signed with the supporting documents.
- Get the money and pay for the car.
New car credit
To obtain a credit for new car, the procedure is much the same but with the big difference of the credit for used car, it is necessary to provide a proof of purchase of the vehicle at the request of a loan for new car. So, after identifying the car of your dreams, you should always make a first request for credit for the car . But by returning the loan contract, you will have to attach a quote or a purchase order for the car.
Regarding the credit for a new car, there are two points on which we must be particularly vigilant .
Mistrust of LOA
It is currently the flagship product for new car credit. We see flourishing everywhere on the manufacturers’ advertisements the possibility of buying cars with small monthly payments . Except that with the Rental with Purchase Option, we have absolutely no idea what we are paying .
And the most absurd with the LOA is that it is legally considered as consumer credit but that the dealers have no obligation to communicate on the legal rate! If it did, many customers would be afraid. Whereas at present LOA progression rates are enormous: + 27.4% over the first 11 months of 2017. And at the same time, new auto credit made -10.5%! (figures from the Association of Financial Companies).
Mistrust of promo credit
Nothing like a promo rate on the car loan to bring people into the dealership. And quite often, it’s even a 0% car loan. This type of credit can be interesting on two conditions:
- The tau promo must be accessible . In other words, if the promotion is only valid for short repayment periods, the monthly payments will be enormous. In this case, the seller may offer a credit for new car over a longer period but with a rate more than all promo. Mistrust.
- The discount on the price of the vehicle must not be less, under the pretext of a promo rate or a free credit. It is a real risk. You should know that a car loan at 0% taeg rate is roughly equivalent to a 5% discount on the price of the vehicle .