How to Properly Finance The Purchase of Used Cars
That's it! You have finally found the used vehicle of your dreams. Follow our advice to finance your new purchase. You do not have the total sum available, it does not matter! There's a solution: credit. Also common for the purchase of a new vehicle, as a used vehicle, here is a selection of available offers.
What is classic credit?
This is the ideal credit for loyal buyers, who keep their car 5 years or more. It is also the most practiced credit on the market. It is proposed by many funding agencies, from banks to credit institutions, through the financial subsidiaries of automobile manufacturers and other independent financial companies.
Be aware that the cost of acquiring the vehicle, the rate, the repayment term, the amount of the monthly payments and the total cost of the credit are fixed as soon as the loan contract is signed. You have the freedom to set the repayment term of your credit, from 1 to 5 years generally, sometimes 7 years in more specific cases, to plan your budget at best. Even if lenders can fund the entire amount, it is strongly advised to make a personal contribution of at least 20%. What are the benefits of a personal contribution of at least 20%? The possibility of obtaining a more attractive interest rate as well as a reduction in the amount of the loan, therefore a final cost of acquiring the lower vehicle.
On the other hand, if you are a victim of destruction or theft of the vehicle during the repayment period, the amount that will be refunded by your insurer will allow you to pay your credit. Except in the case of 100% financing, you may instead have to repay the remainder of the capital.
Finally, the file fees are charged between 1 and 1.5%, depending on the amount of the loan.
The most classic credit:
-simple and accessible
-flexible repayment term
-interesting interest rates
-insured in case of theft or destruction
The least of the classic credit:
-commitment to time
What is leasing? (or rental with option to purchase)
This is the ideal credit for those who change vehicles regularly, about every two years and who do not want to worry about the resale of their vehicle. With the lease you can monthly all costs related to the use of the vehicle. This appropriation allows to determine the value of redemption or repossession of the vehicle as soon as the contract is subscribed. At the end of the funding period, you will simply return the vehicle without worrying about the continuation. If you have subscribed to a purchase option rental, you will be able to recover the security deposit you paid at the beginning of the contract. The operation can be renewed with each new vehicle and each new financing.
If you decide to keep your security deposit, you will agree to a contract that includes a return commitment. This clause then avoids the settlement of the last deadline. In fact this last monthly payment will correspond to the difference between the price of the car and what you have already paid throughout your rental.
Most leasing (LOA):
-very economical in case of infrequent use of the vehicle
-pleasure of driving a new or recent vehicle.
-serenity in the collection of keys.
Less leasing (LOA):
-the mileage to be respected
-contract commitment
-Find all our rental offers with option to purchase on the site of Promoneuve: www.promoneuve.fr
What is the deferral credit?
You have cracked for a beautiful Italian, but you have not yet sold your old car, and the funds you miss. It's not a problem! You can subscribe to a bridging loan to replace the contribution you need for the new vehicle. This credit corresponds to the market value of your old car. So you get an extra time to sell it, and who knows, maybe benefit from a better price!
Another advantage: by combining your car loan and a bridging loan, the borrowed amount may be higher than expected and you will be able to obtain a more advantageous rate. This will allow you to stop before the initial date your bridging loan when you have sold your old vehicle. You will then have the car loan to cover, but at the preferential rate obtained!
Be aware that a relay loan can also be obtained for a motorbike, a camper or a caravan.
The most credit report:
-more time to sell your vehicle
-better business opportunity
-possibility of preferential rates
Least of the credit report:
-commitment to 2 credits.
What are "auto packs"?
The car packs are more and more practiced in occasion. These "all-in-one" offerings are offered by lenders and builders. They have interesting aspects.
They consist of:
-a car credit
-car damage insurance
-technical assistance
-an interview
-a manufacturer's warranty extension.
In these so-called "packaged" formulas, you can benefit either from a drop in the credit rate (in the order of 0.50%) or a discount on insurance (a few months of gratuity). The main advantage of these offers is that you subscribe to all these contracts at one time, to a single organization. So less paperwork, less wasted time.
Unfortunately there are no offers "packaged " standard. Each offer is different. Be sure to compare them before making your choice and to check their content well, so don't miss out on any advantage!
The most auto packs:
-appearance "all included"
-less paperwork
-time saving
-wide selection of offers
The less auto packs:
Opacity of certain offers.
Make your credit quote here!
How can you provide flexibility to your monthly payments?
Hiring you with a credit of 12 to 60 months is an easy thing, even if you have made excellent predictions.
Life is unpredictable and no one is immune from a hard blow or a financial unforeseen. To ensure your refunds are flexible, consider modulation, deferral, or the possibility of postponing deadlines. Postponing the date of the first deadlines can be an interesting asset in case you have not subscribed a deferral credit and you have not waited to sell your car to buy a new one. You can defer payment of the first maturities between one and three months.
There are two types of deferred:
The total deferred credit which consists simply of not paying anything during the deferred period, which gives you no financial obligation until the time of the first payment. Partial deferred credit, which commits you to simply pay the optional insurances to which you have subscribed. This method allows you to settle small expenses in advance so you don't have to worry about it later. This solution can be interesting but take the time to check if the option is paying.
Check the terms and conditions of your contract to avoid the subscription fees. As you credit, you may want to revise the amount of your refunds upwards or downwards as your financial situation changes (salary increase, inheritance, large unforeseen expenses, etc.). Although this solution has interesting advantages, this benefit is not usable at will and may incur costs. Here again check the clauses of your contract.
Finally in case of slight financial difficulty it is possible to carry out a postponement of one or two deadlines (in general one cannot carry out more than two postponements over the entire credit period). This benefit may be granted as a result of an application to your lender, and may therefore incur an additional charge. Here too, be sure to check the conditions for postponing your contract.
What are borrowing rates?
Know that borrowing over a short time is always more advantageous. Interest rates on loans from 12 to 24 months are lower. On the other hand, the automobile is a property that depreciates quickly. A vehicle loses almost half of its value in two to three years. Our advice: the best option is to borrow on a fairly short period, with a substantial personal contribution! Be aware that the interest rate, as well as the file costs are negotiable.
Remember: it is more interesting to accept a decrease in the overall price of the car rather than a drop in interest rates on the part of the seller, because currently interest rates are already very low. You will make a better deal by accepting the rebate offered by the seller. Financial institutions sometimes offer loans at a rate of 0%. To compare credit offers, look more specifically at the communicated TEG.
The overall effective rate consists of:
-interest rate
-costs of sending a file
-death insurance, if its subscription is made obligatory by the institution.
Compare with the same amounts borrowed, on the same repayment term, with the same contribution... You will find the lowest TEG.
For a rental with option of purchase with or without commitment of takeover, the information that you will be communicated will only cover the monthly payments due. The final cost of the transaction will depend on the choice you make at the end of the contract: purchase or takeover of the vehicle by the institution. In addition, auto packs and rentals with option to purchase are generally "all inclusive" formulas; maintenance + repair + maintenance + assistance, etc. The cost of acquiring the vehicle is felt and becomes higher than with a conventional credit.
What is classic credit?
This is the ideal credit for loyal buyers, who keep their car 5 years or more. It is also the most practiced credit on the market. It is proposed by many funding agencies, from banks to credit institutions, through the financial subsidiaries of automobile manufacturers and other independent financial companies.
Be aware that the cost of acquiring the vehicle, the rate, the repayment term, the amount of the monthly payments and the total cost of the credit are fixed as soon as the loan contract is signed. You have the freedom to set the repayment term of your credit, from 1 to 5 years generally, sometimes 7 years in more specific cases, to plan your budget at best. Even if lenders can fund the entire amount, it is strongly advised to make a personal contribution of at least 20%. What are the benefits of a personal contribution of at least 20%? The possibility of obtaining a more attractive interest rate as well as a reduction in the amount of the loan, therefore a final cost of acquiring the lower vehicle.
On the other hand, if you are a victim of destruction or theft of the vehicle during the repayment period, the amount that will be refunded by your insurer will allow you to pay your credit. Except in the case of 100% financing, you may instead have to repay the remainder of the capital.
Finally, the file fees are charged between 1 and 1.5%, depending on the amount of the loan.
The most classic credit:
-simple and accessible
-flexible repayment term
-interesting interest rates
-insured in case of theft or destruction
The least of the classic credit:
-commitment to time
What is leasing? (or rental with option to purchase)
This is the ideal credit for those who change vehicles regularly, about every two years and who do not want to worry about the resale of their vehicle. With the lease you can monthly all costs related to the use of the vehicle. This appropriation allows to determine the value of redemption or repossession of the vehicle as soon as the contract is subscribed. At the end of the funding period, you will simply return the vehicle without worrying about the continuation. If you have subscribed to a purchase option rental, you will be able to recover the security deposit you paid at the beginning of the contract. The operation can be renewed with each new vehicle and each new financing.
If you decide to keep your security deposit, you will agree to a contract that includes a return commitment. This clause then avoids the settlement of the last deadline. In fact this last monthly payment will correspond to the difference between the price of the car and what you have already paid throughout your rental.
Most leasing (LOA):
-very economical in case of infrequent use of the vehicle
-pleasure of driving a new or recent vehicle.
-serenity in the collection of keys.
Less leasing (LOA):
-the mileage to be respected
-contract commitment
-Find all our rental offers with option to purchase on the site of Promoneuve: www.promoneuve.fr
What is the deferral credit?
You have cracked for a beautiful Italian, but you have not yet sold your old car, and the funds you miss. It's not a problem! You can subscribe to a bridging loan to replace the contribution you need for the new vehicle. This credit corresponds to the market value of your old car. So you get an extra time to sell it, and who knows, maybe benefit from a better price!
Another advantage: by combining your car loan and a bridging loan, the borrowed amount may be higher than expected and you will be able to obtain a more advantageous rate. This will allow you to stop before the initial date your bridging loan when you have sold your old vehicle. You will then have the car loan to cover, but at the preferential rate obtained!
Be aware that a relay loan can also be obtained for a motorbike, a camper or a caravan.
The most credit report:
-more time to sell your vehicle
-better business opportunity
-possibility of preferential rates
Least of the credit report:
-commitment to 2 credits.
What are "auto packs"?
The car packs are more and more practiced in occasion. These "all-in-one" offerings are offered by lenders and builders. They have interesting aspects.
They consist of:
-a car credit
-car damage insurance
-technical assistance
-an interview
-a manufacturer's warranty extension.
In these so-called "packaged" formulas, you can benefit either from a drop in the credit rate (in the order of 0.50%) or a discount on insurance (a few months of gratuity). The main advantage of these offers is that you subscribe to all these contracts at one time, to a single organization. So less paperwork, less wasted time.
Unfortunately there are no offers "packaged " standard. Each offer is different. Be sure to compare them before making your choice and to check their content well, so don't miss out on any advantage!
The most auto packs:
-appearance "all included"
-less paperwork
-time saving
-wide selection of offers
The less auto packs:
Opacity of certain offers.
Make your credit quote here!
How can you provide flexibility to your monthly payments?
Hiring you with a credit of 12 to 60 months is an easy thing, even if you have made excellent predictions.
Life is unpredictable and no one is immune from a hard blow or a financial unforeseen. To ensure your refunds are flexible, consider modulation, deferral, or the possibility of postponing deadlines. Postponing the date of the first deadlines can be an interesting asset in case you have not subscribed a deferral credit and you have not waited to sell your car to buy a new one. You can defer payment of the first maturities between one and three months.
There are two types of deferred:
The total deferred credit which consists simply of not paying anything during the deferred period, which gives you no financial obligation until the time of the first payment. Partial deferred credit, which commits you to simply pay the optional insurances to which you have subscribed. This method allows you to settle small expenses in advance so you don't have to worry about it later. This solution can be interesting but take the time to check if the option is paying.
Check the terms and conditions of your contract to avoid the subscription fees. As you credit, you may want to revise the amount of your refunds upwards or downwards as your financial situation changes (salary increase, inheritance, large unforeseen expenses, etc.). Although this solution has interesting advantages, this benefit is not usable at will and may incur costs. Here again check the clauses of your contract.
Finally in case of slight financial difficulty it is possible to carry out a postponement of one or two deadlines (in general one cannot carry out more than two postponements over the entire credit period). This benefit may be granted as a result of an application to your lender, and may therefore incur an additional charge. Here too, be sure to check the conditions for postponing your contract.
What are borrowing rates?
Know that borrowing over a short time is always more advantageous. Interest rates on loans from 12 to 24 months are lower. On the other hand, the automobile is a property that depreciates quickly. A vehicle loses almost half of its value in two to three years. Our advice: the best option is to borrow on a fairly short period, with a substantial personal contribution! Be aware that the interest rate, as well as the file costs are negotiable.
Remember: it is more interesting to accept a decrease in the overall price of the car rather than a drop in interest rates on the part of the seller, because currently interest rates are already very low. You will make a better deal by accepting the rebate offered by the seller. Financial institutions sometimes offer loans at a rate of 0%. To compare credit offers, look more specifically at the communicated TEG.
The overall effective rate consists of:
-interest rate
-costs of sending a file
-death insurance, if its subscription is made obligatory by the institution.
Compare with the same amounts borrowed, on the same repayment term, with the same contribution... You will find the lowest TEG.
For a rental with option of purchase with or without commitment of takeover, the information that you will be communicated will only cover the monthly payments due. The final cost of the transaction will depend on the choice you make at the end of the contract: purchase or takeover of the vehicle by the institution. In addition, auto packs and rentals with option to purchase are generally "all inclusive" formulas; maintenance + repair + maintenance + assistance, etc. The cost of acquiring the vehicle is felt and becomes higher than with a conventional credit.
Comments