This guide is there to present you the different options available for financing your future car through a car loan. You will be able to compare the different financing possibilities, and make the choice most suited to your car purchase project. In this article, also discover how to proceed for your car loan comparison.
How to choose the right car loan?
Whether for a car, a motorcycle or a motorhome, each project is different. Do not panic, we are here to guide you in comparing car loan offers.
With or without personal contribution
Having a personal contribution is always a guarantee of confidence for a car salesman. This is also the case when you apply for a car loan to supplement your contribution. The best purchasing and credit solutions will only be presented to you if you have a personal contribution.
If you don’t have a contribution, you can still use a loan to cover the cost of the purchase. But you may be limited in choosing the amount to borrow. Whether new or used, you will have to think about budgeting for the purchase of this car, and in particular the monthly payments to be reimbursed each month.
You will also have to demonstrate to the seller or the credit institution that you are able to repay the loan, even with a down payment.
According to the desired amount
It is advisable to define well your project of acquisition of a vehicle to know its financing needs. You can also turn to cars for which the government pays a purchase bonus (hybrid or electric motors). Also think about your repayment capacity, the monthly payments of a credit are an additional charge in your budget.
The duration and amount of the car loan
By arbitrating between the duration and the amount of the monthly repayment, you can find the perfect balance. In France, the minimum duration of a car loan is 3 months and it cannot exceed $ 75,000.
In fact, the shorter the repayment period, the less interest you will pay, but the monthly payments will be high. If on the contrary you prefer to have lower monthly payments, it is best to extend the duration of your loan over time.
There are a multitude of organizations that offer car loans, but all of them apply different rates. It will also be necessary to take into account any promotional operations: drop in temporary rates, free administration fees, partnerships with car manufacturers.
In order to be able to see the rates according to your needs, you can make simulations for your credit on our site.
The insurance of your car is compulsory, but this does not include the insurance of your car credit. Auto credit insurance is optional, but highly recommended, as it allows you to be more serene in the event of an unforeseen event.
- Temporary interruption of work: when you are no longer able to work following an accident or illness.
- Loss of employment: in the event of dismissal, the insurance can take care of the monthly payments of your loan. The treatment can be partial or total. Depending on the insurance company, a waiting period may also apply.
- Death: the insurance covers the family following the death of the holder of the credit contract.
- A permanent and absolute invalidity: illness or an accident can sometimes cause incapacity. This insurance allows you to be serene in the event of a serious disability vis-à-vis your loved ones.
The type of consumer credit
Personal loans and restricted loans are the most commonly used consumer loans to finance a vehicle. The notable difference between the two? The personal loan is not dedicated to a particular purchase. You are free to use the loan amount as you wish. In other words, it is also possible to finance your car with part of the loan, and works or a trip with the other party. Something that will not be possible with a consumer credit of the affected type. Your choice will mainly depend on your needs.