You want / need to buy a car and, to avoid paying the full amount of cash, do you want to buy an auto finance? Good idea but do you know that there are several forms? Which one to choose ? We help you …
The purchase of a car can be done in many ways and in this area, auto credit is probably one of the most popular forms of financing. Indeed, since it is the bank that advances the funds, the borrower does not see his savings being penalized. An advantage when we know that interest rates have fallen over the last few months and that the offers are more and more interesting. But then, what options are available to you?
CLASSIC CAR LOAN, THE BEST-KNOWN SOLUTION
What we call conventional car credit is neither more nor less than a consumer credit allocated to the purchase of your car . This is the most popular solution for households and has a definite advantage. In fact, auto credit starts only if you are actually delivered your vehicle. In case of non-delivery or non-compliant delivery, you have no credit to pay. It may seem obvious but not that much …
AUTO LOAN IN THE FORM OF A PERSONAL LOAN
In some cases, households prefer not to opt for a conventional car loan to move towards a personal loan. Depending on the needs, this can be interesting, especially if it is well negotiated but, unlike conventional auto credit, in case of non-delivery or non-compliant delivery, you will have to pay this loan. From the moment the personal loan is not assigned to the purchase of any particular property, the funds are automatically transferred to your account and you are free to spend the money as you see fit, without any guarantee.
UNRECOGNIZED FORMS OF AUTO CREDIT
In addition to these two solutions generally known to the general public, there are also options such as:
- Long Term Rental (LLD): As the name implies, this solution makes the borrower a tenant of a vehicle that he will have to replace regularly (between 2 to 4 years). During this period, the renter can not exceed an agreed mileage at the time of the contract and can not become the owner of the vehicle at the end of the contract.
- Lease with Purchase Option (LOA): For those who want to eventually become the owner of the rented vehicle, it will then turn to rent with option to buy or zero down auto financing.
WHICH ORGANIZATIONS TO CONTACT?
In terms of auto credit, there are several types of players that you can contact to find a satisfactory option. These are:
- Banks (classic or online)
- Insurance companies
- Credit organizations
- Car Dealers (via their financial subsidiaries)
- Leasing (in the case of the LLD or the LOA)
HOW TO KNOW WHICH OPTION TO CHOOSE?
Before setting your sights on a form of auto credit, it is important to compare the offers of different parties. For that :
- Define which car you are going to buy
- Determine what contribution you can make
- Evaluate how long you want to drive the vehicle according to its usage
- Compare offers
- To negotiate
Depending on how you use your car, you can easily identify whether it is better to choose an LLD than a conventional car loan or buy a personal loan . In the end, everything depends on you, your needs, your profile, etc.
Once you have answered all these questions, it will then be easy for you to determine which is the best solution for you. And do not forget that we put tools at your disposal to help you in your steps.