Auto credit and vehicle type
You want a new vehicle but do not have the finances to invest in it? Be aware that a credit can be granted to finance the purchase of any type of vehicle, new or used. Let’s take stock of auto credit and the different types of vehicles.
The car loan
There is currently a multitude of credits on the market. However, if you want to invest in a vehicle, the most simple and secure way is the car loan, the credit allocated exclusively to the purchase of a car.
Nevertheless and depending on the type of vehicle, it is possible that the car loan is not the best option to select. Indeed, depending on the type of vehicle (new or used, car or motorcycle …), the car loan can vary in the same way that the price of a car varies depending on its type.
So if you choose a used sedan, your car loan will not be the same as if you want to invest in a new utility. In this way, there is a considerable difference in the cost of credit depending on the type of vehicle.
The new car
Auto loan is the ideal solution to invest in a new car. Indeed, this credit lends itself very well to this type of purchase, the price of the vehicle being high and the life of the long car (because new).
Thus subscribing to a new car loan allows the unlocking of background higher than for the acquisition of a used car. As the amount requested is substantial, it is important to have a longer repayment period. Generally, the refund begins upon receipt of the vehicle. This type of loan can be contracted in any banking or credit structure, but also directly at a car dealership.
There are other ways to acquire a new vehicle. In the continuity of auto credit, some institutions offer a package of auto loan, insurance, maintenance, assistance or even extended warranty in order to benefit from better borrowing conditions and a monthly deduction unique.
In addition, you can decide to opt for rental with option to buy. This system makes it possible to rent the vehicle up to 72 months then to buy the vehicle benefiting from reductions and the inclusion of rents already paid.
Finally, know that the funds then released go directly to the seller and the borrowing rate (between 1% and 5% depending on the amount borrowed and the repayment term) is very advantageous because the structures that lend the money know that in In the event of a refund problem, they will be able to seize the vehicle that will still have a great financial value.
It seems more suitable to choose a personal loan to finance the purchase of a used car. Indeed, the repayment period of this type of credit is often much shorter than a car loan, so it seems more consistent to choose this type of credit for a car that will have a shorter life than a vehicle new.
The funds granted are made available to the borrower. Thus, it allows the buyer to dispose of these funds as he sees fit. In this way, if the used car needs repair, the borrower will be able to draw in the amount he has been granted to buy and repair the vehicle.
However, the personal loan generally has a higher interest rate than the auto loan and the repayment begins as soon as the amount borrowed has been paid.
The car without a license
There is no loan specifically designed for the purchase of a car without a license. However, you have two options for investing in this type of vehicle. Indeed, if the car is new, you will be eligible for the car loan and its various financing methods (car loan, car pack or rental with option to buy).
But if the vehicle is used, you can only subscribe to a personal loan, allowing you to use the funds to make repairs in addition to the purchase for example. In both cases, you can buy your car but not with the same rate and the same conditions.
The utility vehicle
In the same way as for the purchase of a car without a license, you will have the choice between two types of loan. The car loan or the personal loan depending on whether the vehicle is new or used respectively.
However, a commercial vehicle, having on average, in France, a cost of around 20 000 $ new, it is perhaps better to invest in new to benefit from a car pack or rental with option to buy where the interview may be included in the contract; you will benefit from a longer repayment period than the personal loan for the purchase of a used vehicle.
Finally, since utilities are mostly bought by businesses, it may be better to consider a more advantageous auto loan than a personal loan to keep the company’s cash for other investments.
The SUV is a category of car inaugurated in 1994, very fashionable nowadays. It is therefore possible to finance your SUV with a car loan if it is new and a personal loan or credit assigned if the latter is used.
The purchase of a new SUV requires borrowing a large sum, although it is possible to find entry-level models, French, less than 20 000 USD.
On the side of the occasion, you will find entries of ranges for 10 000 USD.
The electric car
Electric cars start to have the side. However, its high price tends to dampen buyers. Indeed, a new electric car costs between 18 000 and 25 000 $ except battery, you will have to pay between 5000 and 6000 $ to obtain it. The second hand market is still small (count about 10,000 $ for a second hand).
Be aware, however, that there is help to reduce the purchase cost of your new electric vehicle, in fact, you can benefit from ecological bonuses or significant conversion premiums to help you.
So if you want to buy a new vehicle, the auto loan will lend itself to your project. If you want to buy a used car, you will need to subscribe to a personal loan with a higher rate than the car loan. In addition, the purchase of an opportunity prevents you from benefiting from all the aids and bonuses available for the purchase of a clean vehicle.
The camping car
Some lending structures offer motorhome or recreational vehicle credits, their interest rates are around 4 or 5%. These rates are quite advantageous when you know that this type of vehicle can cost at the entry level, nine, between 35,000 and 45,000 USD. And in full, more than 60,000 USD.
The second-hand market is more affordable. You can find vans from 18 000 USD and the integral from 30 000 USD approximately.
These motorhome credits are in fact either auto credits if the vehicle is new or an affected personal loan if the van is used. In both cases, it will be possible to negotiate the repayment period, not innocuous for such a big purchase. However, it will not be necessary to commit to a too long period, indeed, the motorhome having a large and fast haircut.
It is not possible to buy a motorcycle with a car loan currently, whether new or used. To finance your bike, it is possible to contract either a personal loan or an assigned credit.
The credit allocated is a consumer credit reserved exclusively for the purchase of a specific property. Current rates are around 10% for the purchase of a motorcycle of at least 5000 USD. There is no maximum legal repayment period for this type of credit, however the majority of lending institutions will offer a term of between 7 years and 10 years.
To conclude, know that it is important to check the terms and conditions of the contract. Also inquire about the conditions for early repayment or potential penalties for non-payment of monthly payments.
In any case, buying a credit is not an innocuous act. It’s a commitment. You need to take the time to think, including comparing prices and performing simulations of auto loan or personal credit to select the loan offer best suited to your repayment capabilities.