If the automotive professionals have returned to smile thanks to a good progression over last year, buyers can also have it since the auto credit rate has been quite low during this period.
Indeed, credit rates are below 1% for one-year loans. On the other hand, as soon as the length of the credit increases, the rate is rather up, this is the case for credits over three years or more.
What rate on a short term?
Short-term auto loan is defined as a commitment of one to three years. If you want to buy a vehicle, you have to count for a credit over one year, on an interest rate of around 1%.
This varies according to the amount borrowed. If you borrow between 3,000 USD and less than 5,000 USD, it is 1%, between 5,000 and 9,999 USD, it is of the same value. From 10,000 USD, it goes to 0.75% for the lowest and 0.83% on average.
For a two-year loan, the average is 2.55% and 2.80 over three years. It must of course be kept in mind that the higher the amount borrowed, the lower the credit rate.
What is the rate for long-term loans?
When you want to borrow for more than three years, the rate skyrockets. Indeed, a car undergoes a significant discount and because of this, the lender remains cautious and its rate increases.
It should also be noted that the year 22018 has an upward trend which is particularly true in the context of the credit exceeding 36 months.
So if the amount borrowed is less than 5,000 USD, the rate starts at 3.47% and can rise to just over 6%. If the sum is higher, the rate is between 2.20% and about 5%. It is therefore best to think about the duration of borrowing before buying a new vehicle.
Is the rate more interesting at the dealer or at your bank?
Buying auto credit directly from your dealer may seem interesting because it’s faster. You take your credit at the same time as you buy your car, without any other steps to take.
It is also true that credit is often obtained more easily by this means. However, be careful because rates can be among the highest in the market. Do not be lulled by the well-worked argument of the seller who has every interest in selling you the loan at the same time as the car.
Even if you get a nice discount on your car taking credit, think long term. The credit, you will repay it for a certain period, so you have to be vigilant.
Do not sign your papers in a hurry, but take the time to do a simulation on our comparator of auto credits.
This quick and easy operation can save you a lot of money you spend on something else.
Requesting a comparison is also useful for looking at different loan proposals without haste and stress. You can take the time to read all the clauses, something difficult to do when you subscribe with your bank or the dealer.
You also have a certain freedom of choice because you are not influenced by the words of your advisor or salesman. Remember that their financial interest lies in selling you their product.
Finally, if some points seem unclear to you or if you need help, you have contact details of banks or financial organizations and can call them to have all the information you want. Then all you have to do is make your choice, depending of course on the cost of the credit, your personal situation and the interest rate that is charged.
Playing the competition allows to find the offers of credits with a rate of interest of the most attractive. D
In general, credit institutions often offer a much higher interest rate than banks, which is why the comparison is essential to better understand the problem of your choice.
To make a good simulation, it is necessary to be precise in the information provided concerning in particular the amount and the ideal duration of loan.
Some additional tips
Before doing your simulation, determine your borrowing capacity and your debt ratio. So you know exactly how much you can afford to borrow without being strangled by debts.
The rest to live is an element that determines your financial situation for the year or years to come. Be careful enough not to be too fair.