November 4, 2020
New car loan at the best rate: understand everything Relaxed happy woman on summer roadtrip travel vacation leaning out car window on blue sky background.

New car loan at the best rate: understand everything

As its name suggests, the new car loan is for people who want to buy a new car. It is important to specify this, because it will not be the same type of car loan for the occasion. For a new car loan, you have to go through a car loan in order to benefit from a better fixed APR rate. In any case and whatever the desired amount, the best solution is to compare the rates online.

How does a new car loan work?

How does a new car loan work?

Before getting started and taking out a new car loan, some information is important to underline.

The first thing to remember is that a new car loan will be made by a “car loan”, which is governed by the law on consumer credit. Based on the fixed APR rate, the legal benchmark for consumer credit, this loan is very much subject to the law.

This Annual Total Effective Rate includes all the additional costs of a new car loan such as, for example, the administrative costs. It thus allows customers to be informed about the total cost of the credit contracted and gives the possibility of comparing the different market rates objectively. It is also thanks to this car loan rate that we are able to offer a comparison of the best new car credit organizations available on the web.

Very small rate = big monthly payment?

The second important information is that you will have to use all the money from the new car loan exclusively for the purchase of the vehicle. Proof of purchase must be presented to the lending organization for the latter to agree to grant the new car loan.

Also watch out for offers with rates below 3%, which in most cases will require a refund within 36 months or less, involving very high monthly payments. If the income allows, do not hesitate. By cons do not fall into the trap of being attracted by this small rate over a short period, listen to the seller who will offer a car loan over 72 months more suited to the budget but forgetting to specify a rate of 7 or 8 %.

The best car loan is above all the one that best adapts to its repayment capacity.

Car loan in concession

Car loan in concession

For the purchase of a vehicle, there are several new car credit solutions that can be realized. The first is of course to make a classic car loan directly from the dealer. The biggest manufacturers, like Volkswagen or Peugeot to name just two, offer new car loans directly when purchasing the vehicle via their financial subsidiary like Diac for Renault for example.

However, we must remain vigilant, because in most cases, the total cost of new car credit will be higher than on the market of large credit organizations. The only exception: during a credit promotion period, the new car loan rates offered in dealerships are very attractive, you just have to check the APR rate offered.

New car loan offered in bank

New car loan offered in bank

Another type of solution for new car credit can be considered. It is a car loan offered directly by your bank. You usually have to be a customer for many years to take advantage of the best rate for a new car loan in the bank. But banks and credit don’t always mix.

Please note, this proposal will not necessarily be the best available on the new car loan market. This will make it possible to have the best fixed APR rate for the car loan on the market of large financial organizations and to see concretely how the bank stands, even if it negotiates if the banker accepts it…

Similarly, it is possible to go through insurers to take out a new car loan. However, in the same spirit as for a credit contracted in bank, it is necessary to be customer for many years to hope to have a proposal worthy of the name or to obligatorily take their insurance.

Go through a specialized organization

The last solution and generally the most economical, is to go through a credit organization to save on new car credit. Nothing could be simpler in this case, you just have to go directly to our comparator which keeps up to date the fixed APR rates of the largest consumer credit organizations. Anyone can then take advantage of the most economical credit on the market by filling out our questionnaire. This questionnaire takes only a few minutes to complete and also allows you to know who is ready to finance your file and at what rate.

In order to prove the benefits of going through our credit comparator, here is a small example to illustrate our point. Take a new car loan worth $ 15,000 to repay over 60 months.

Or more than 1000 USD difference between the organization with the lowest fixed APR rate and the third. A savings of more than $ 1,000 will allow you to add options to the car, or to more peacefully reimburse the first monthly payments.

In all cases, for all types of credit of any amount (select the amount immediately above the price of your future car, the loan amount will be adjusted at the last stage of the subscription), a simple comparison will allow find the best fixed TEAG rate on the market suited to everyone’s profile.