You are now decided to buy a new vehicle, and to take out a car loan to finance it. But do you know how this borrowing mode works? Mastering all the components of the car loan can indeed allow you to make great savings when confirming your purchase.
The specifics of car credit
Because of its specialization, auto credit imposes precise conditions of use : the amount borrowed cannot exceed $ 75,000, in a minimum of 3 monthly payments. This car loan must only be used for the acquisition of a vehicle.
A constraint that turns into an advantage if the sale fails, because it saves you from having to find yourself with superfluous car credit. Above all, it ensures the cancellation of the sales contract in the event of the loan not being obtained or the vehicle not being delivered. These elements allow the banker greater peace of mind, offering more chances of obtaining the loan.
The supporting documents to be produced
Due to the clear identification of the purpose of the car loan, banks require fewer supporting documents than for other forms of credit. You just need to provide the following:
- proof of identity (identity card, passport, etc.);
- proof of address (receipt of rent, water bill, telephone bill, etc.);
- Bank details ;
- photocopy of the last 3 payslips.
Auto credit: the selection criteria
Depending on your contribution, your monthly repayment capacity, you will be offered several installments depending on the car loan rates in effect, and the amount you wish to borrow. The longer you borrow over the long term, the lower the rate (and the higher the interest on the loan). Be careful to take into account in your calculations additional costs such as application fees and contributions! To avoid this pitfall, trust the APR (Annual Effective Global Rate), often highlighted in credit offers.
Once you have made your choice, you will get a preliminary offer of car credit, which will allow you to calmly conclude your purchase.
Get the best price for my car loan
For vehicles with a value greater than $ 10,000, you can contact a broker, who will be responsible for getting you the best loan offers. You can also compete against the banks yourself, using our free car credit rate comparison service!