Need a car?
Need money for a car? Yes, auto credit is an appropriate solution. It’s a great way to get a car without breaking the bank. You only need to borrow a reasonable sum, which you will be able to repay within a specified time. To do this at best, it is advisable to learn about the various credit offers and it is here that will come into play the loan comparators and their simulations online.
When it comes to applying for a loan to invest in a vehicle, 2 types of credits will be offered to you at first: Assigned auto credit and personal auto loan.
The assigned car loan is granted under conditions directly related to the purchase of the vehicle in question. The financial institution will release the amount necessary for the purchase of the property, neither more nor less. It is a particularly secure loan. In the event that the sale is not made, the car loan is canceled. It is the same if the vehicle is non-compliant.
The personal auto loan is a loan more free for the purchaser since it is not assigned to a specific property. On the other hand, the credit will not be canceled in case of non-conformity of the product. This means that even if the vehicle is not purchased, the payment of the credit and the monthly repayments, not being related to the purchase, will still take place.
In both cases, the amount borrowed can not exceed 75 000 € and its reimbursement must be done in 3 months minimum. No maximum repayment duration is fixed to date, however it rarely exceeds 7 years.
How to make the right choice ?
When it comes to choosing a car loan, it is possible to apply to a bank, a financial institution, but also directly to the dealer. Dealers can offer auto loans that they have previously negotiated and selected. In all of this, it may be difficult to determine the best option.
The credit comparators and online simulations are here to help you. Whether it is to identify the ideal credit or simply to get an idea of the market, many comparators offer credit simulations. This allows the buyer to have a general view of the various sums that can be advanced to him and the different monthly payments he will have to repay.
During the simulation, it is necessary to indicate the type of desired good (car, motorcycle, etc.), the necessary amount of the credit, and the monthly payments to then know the duration of the repayment and the total sum, rate of interest included. It is thus possible to play on the interest rate and the final sum by evaluating your ability to repay the loan.
When it comes to a simulator in a comparator, the latter will offer you a list of the most interesting auto credits with their characteristics: Minimum and maximum amount of the loan as well as the minimum and maximum duration of the repayment, the whole usually accompanied by a ranking. After selecting one of them, you will be able to simulate the different scenarios of this credit.
In addition, some comparators offer a purchasing capacity simulator and a debt ratio simulator allowing you to evaluate your ability to borrow and repay.
Practical case :
Take the example of Paul and Marie, a 25-30 year old couple who wants to invest in a new car. They have already spotted the car of their choice and know they will have to borrow the sum of 13 500 €. Given their income, they can pledge to pay monthly installments of 300 € per month.
Thanks to the online simulations, they discovered that they will have to pay monthly installments for 4 years to reach the end of monthly payments. In the course of their research, they focused on 2 organizations whose offers did not offer any fees.
For the first organization, the reimbursement will be made with monthly installments of € 300.91 spread over 48 months and a fixed rate of 3.36%. The total amount of the final will therefore be € 14,443.23, or € 943.23 of interest.
In parallel, with the second organization, for the same borrowed sum of 13 500 €, monthly payments will be 301,05 € for 46 months. This gives a total amount of € 14,149, representing interest of € 649.35 for an interest rate of 2.4%.
In the end, we see that for monthly payments of 0.15 € more per month, the couple will save 1 month and especially 300 € after paying the whole to the second body.
After the fact, the couple reviews his budget, realizes that he can consider monthly payments of 400 € and redoes the simulation. The interest rate goes up to 2.2% and the interest that was 650 € is now only 446 €. As a bonus, the loan will now be repaid in just 3 years.
To know :
- It is very good to arrive with a contribution when applying for a loan.
- Auto credit insurance is not mandatory but highly recommended.
- For hybrid or electric cars, the government pays a bonus on the purchase.
- It is sometimes interesting to watch the promotional offers of the market, especially in terms of interest rates.
- Hidden file fees can sometimes be hidden in credit proposals
- Pay attention to the revisable interest that may evolve during repayment
- Alternatively, instead of applying for a credit, an individual may engage in a vehicle purchase option (LOA) lease.