The purchase of a vehicle needs an investment that can be in thousands of Euros for basic models, and tens of thousands of Euros for drivers who aim rather at high-end. Difficult, therefore, to raise the amount necessary for a cash payment! The auto loan, which responds directly to this need for financing, is one of the most popular consumer credit.
In this context, do you know how to obtain the best conditions for your online auto loans, whether it is contracted from a dealer, a bank or a credit institution?
A similar principle for auto credit…
An “auto credit”, when specifically named as such by the lending organization, logically belongs to the family of appropriations allocated. It consists in granting the borrower a sum of money specifically intended to cover the purchase of a motorized four-wheeled vehicle.
The granting of the credit and the actual purchase of the vehicle are indissolubly linked: if the delivery of the car, for one reason or another, is canceled, the auto loan is null and void and the borrower does not so nothing to repay. Conversely, a borrower who cannot find a lender can cancel the sales contract at no cost. Finally, an assigned car loan will not be reimbursed until the owner receives the vehicle.
Note that it is also possible to buy a car by taking out other forms of credit less supervised.
Key features of auto Loan
Difficult to sort out in the jungle formulas all wanting more enticing than each other. However, it is possible to compare different offers effectively by limiting themselves to a few key criteria:
- The annual percentage rate (APR) , in the form of an annualized percentage, reveals the full cost of the credit, i.e. the sum of the interest payable at the nominal rate and the potential filing fees and other charges. So it is important to monitor them. The TEG may also be expressed as a specific amount in Euros, the total cost of credit, which will be the difference between the total amount repaid by the borrower and the amount borrowed originally.
- The duration of the credit is in months. With an equivalent loaned amount, a longer term is equivalent to lower monthly payments, but also to a higher total cost of credit. In any case, it is recommended not to borrow for more than five years (60 months), which is the most conservative estimate of the life of your future vehicle.
- The borrower insurance is not required by law for a consumer credit and therefore for a car loan. If the amount borrowed is important in terms of your income or savings, it is recommended to make sure at least against death and total incapacity for work.
In all cases, a larger personal contribution reduces the amount to be borrowed and, therefore, you incur a little less debt. Do not hesitate to postpone your purchase for two or three months if this can allow you to put on the table an interesting amount.
Where and how to borrow?
Auto loans are offered by three major categories of lenders.
- The car dealers themselves, first of all, have an undeniable practical advantage: you can buy your car loan at the same time as you sign the contract for the sale of the vehicle. These loans, moreover, are very often integrated in a “pack” offering many other services, including vehicle insurance, breakdown assistance, extended warranty or a vehicle maintenance subscription.
- Your bank, too, necessarily has an offer for auto loans. It is therefore recommended to make an appointment with your advisor to explain your project and examine the loan offer that will be made to you. This option is usually less expensive than a concessionary loan.
- The self credit specialized agencies finally have a wide range of options for the purchase of a personal vehicle.
The terms of subscription for a car loan are relatively simple. All you need to do is provide a photocopy of your ID, a recent proof of residence, a bank statement, a proof of income or resources (pay slips, statements of account …) and of course a copy of the certificate. Vehicle control.