Auto credit: what is the best rate that can be found?

Would you like to buy a new or used car? Find out how to find the best auto credit rate.

The interest rate is one of the main elements to be studied by borrowers looking for a car loan. Between the borrowing rate and the APR, it is not always easy to navigate. Here are some tips to help you get the best loan terms.

Understand how auto credit works

Understand how auto credit works

The car loan is intended to facilitate the acquisition of a vehicle in return for the payment of monthly payments. It differs from the personal loan because it can be assigned only to the purchase of a car, whether new or used. This type of credit offers several advantages to the borrower. Indeed, if the car is not delivered, the loan is automatically canceled. Similarly, if the buyer sees his credit request refused, the sales contract is considered void. Finally, the repayment of the loan starts only when the subscriber is in possession of his car.

The amount of the sum borrowed, the repayment term and the interest rate are fixed by the parties at the time of the subscription of the car loan. But before that, the bank scrupulously studies the plaintiff’s file. Borrowing conditions generally vary depending on the client’s profile and potential personal contribution, the amount and duration of the contract, and the commercial policy of the institution. To put all the chances on one’s side, the borrower may have an interest in waiting until the end of the payment of another credit before submitting his file.

Auto credit: what are the rates on the market?

Auto credit: what are the rates on the market?

This table presents the rates currently offered on the market for a loan of 15 000 USD repayable over a period of 12 months.

 

Type of credit

 

TAEG min

 

Average TAEG

 

TAEG max

Car credit – vehicle under 2 years

0.94%

1.83%

4.40%

Auto loan – used

0.94%

1.83%

4.40%

Thus, a borrower who wishes to subscribe a car loan of 15,000 USD over 1 year can hope to find a rate of 0.94%.

How to find the best auto credit rate?

How to find the best auto credit rate?

Several credit rates can be displayed for the same offer. It is important to differentiate the lending rate from the annual percentage rate of charge (APR), which provides different information. The borrowing rate or nominal rate corresponds to the interest rate proposed by the lender excluding ancillary costs. It serves as a basis for calculating monthly payments that will have to be repaid. The APRC includes all costs related to the credit (administrative fees, opening fees, account maintenance fees, guarantee fees, etc.). Banks set their own credit rates. However, these must not exceed the rate of wear defined each quarter by the Banque de France and published in the Official Journal.

These tips will help you find the best auto credit rate:

  • Play the competition
  • Focus on the APR
  • Take care of your funding

A multitude of specialized organizations offer auto credit offers. To sort and find the most advantageous offer, it is strongly recommended to use an online comparator. After indicating some information about your project, you will access several quotes corresponding to your expectations.

If you want to find the best offer, focus on the APR that represents the total cost of credit. The bank has the obligation to give you this indicator when it offers a loan.

Your loan file is decisive when you subscribe. To convince the bank to give you a car loan, do not hesitate to highlight your bank history and to prove your good financial management.