The loan for new or used car is not the prerogative of the credit organizations. We can also turn to banks and dealers. But everyone has their specialties. And before embarking on a car loan, it is better to know where you set foot. In particular thanks to our detailed article on car credit.
New car ready
Get the cheapest new car loan
Competition is quite strong on new car credit. To get the best rate, there are 4 great contenders:
- Specialized credit organizations
- Car dealerships
To get a cheap car loan from specialized organizations, it’s quite simple, you have to go around the market. This is what we do daily to keep our credit comparator up to date.
Even if they are generally the best positioned on this market , concerning the loan for new car, it can be interesting to make compete with the banks, insurers and dealers. This will be much less the case for used auto loans.
The Best Car Credit Organizations
Avoiding the Traps of Auto Credit
1: the promo rate
Do not confuse posted car credit rate and obtained rate . Indeed, most financial companies put forward rates that seem very low. But they are offered on very short repayment periods, generating astronomical monthly payments. You are then offered to extend the duration of the credit, but there is no longer any question of the promotional rate…
A posted rate is not a granted rate . In terms of consumer credit, more than one in two car loan applications is refused . It can be tempting for some companies to hold out very low rates but to accept only the best applications. This is the reason why we have connected our comparator to most of the credit organizations. After completing a request on our site, each file receives an immediate individualized response from the cheapest organization . If the file passes, so much the better. Otherwise, you just have to interrogate the one ranked second with a single click.
Banks and insurance
We have analyzed in detail the car loan offers from banks. They are only competitive for already known customers and “good customers” of the bank. And better to fall at the time of promotions if not, it is generally expensive. This is particularly the case with the Astro Finance car loan. If we think that his bank can make an interesting proposal, we recommend applying the following negotiation method :
- Get the best rate from consumer credit specialists
Very simple, just go through our auto credit comparator.
- Print the advance credit offer
The credit organization will send it by email or by mail the credit offer it offers. This is the major negotiation asset.
- Make an appointment with his bank
We must first wait for the bank to make a formal proposal. Either it is better than that obtained with our comparator or the banker only liked to line up. In any case, the customer gets the best car credit .
It is not far from being the same with the new car loan from insurers. But there in addition, to take advantage of promotions on credit, it will be necessary to take insurance with them. The best known of these is the MAAF auto loan.
Car dealership credit
Getting a car loan from a dealer has become exceptional! We don’t exaggerate that much. The level of new car loan requests has never been lower . The statistics of the ASF, Association of Financial Companies, have never been so bad concerning new car credit: -10.8% in 2017 and -6.0% in the first quarter of 2018 (see ASF statistics).
Is this linked to the difficulty of the market for new car sales in France? Not at all. The loan request for new car is strongly attacked by the mass arrival of Rental offers with Purchase Option, called LOA . And to a lesser extent by long-term rental offers, say LLD. Indeed, over the same period, the LOA on new cars benefited from a 25.7% growth in 2017!
Should you take an LOA on a new car?
We had carried out a comparative survey between car credit, LOA and LLD, and we had concluded at a cost of around 1000 $ higher on LOA and LLD compared to credit on the example we had taken. The advantage is that there was no need to worry about reselling the car with the LOA … But for 1000 $ all the same! And the LOA has the other disadvantages of masking the real cost of credit and generally including unnecessary services that one does not have the impression of paying because they are monthly… As long as the LOA is such an opaque car loan , we cannot recommend it.
Under these conditions, dealership loan rates and offers for new cars are generally uncompetitive . But the way of negotiating with the banks can also apply with the dealers. The only time of the year when new car loan offers can be attractive at a garage, is during promotional car credit 0%. So don’t miss them.
Ready for used car
The used car loan is not as complicated as that for new cars. Indeed, banks hardly offer this type of financing without talking about insurers.
And since most sales take place from individual to individual through sites like leboncoin or LaCentral, credit organizations are almost the only ones to position themselves on this market. For those who go through a dealership to buy a used vehicle, that does not prevent asking the seller for a proposal. But even more than for a new car, we strongly advise to compare with the rate of specialized credit organizations.