Car Credit Rates: Online Comparator and Free Quotes
What is the interest rate for a car loan?
When you buy a consumer credit, it consists of:
- Capital, that is, the total sum borrowed;
- Interest, that is to say the amount that you ask the lender more, especially to pay for the service rendered.
The interest rate is the amount paid by the borrower to the lender when expressed as a percentage. The auto credit interest rate meets exactly the same definition: this is the price that applies to the amount of money lent to purchase a vehicle, whether new or used.
Example: if the bank loans you € 1,000 for your car loan, with an interest rate of 10%, at the end of the year, you will need € 1,100 (€ 1,000 for the amount borrowed + € 100 for the rate interest rate of 10%).
The different types of auto credit rates
When looking for the best credit rate, you will certainly see different credit rates for the same offer. Indeed, for the same offer of auto credit, the institution can inform you the borrowing rate and the annual percentage rate. These two indicators bring you different information:
- The borrowing rate, also called nominal, is the interest rate proposed by the lending institution, excluding ancillary costs. It is it that serves as a basis for calculating the monthly installments that you will have to repay each month;
- The annual percentage rate of charge, or APR, is the interest rate proposed by the lending institution, including ancillary costs. It thus includes the expenses of the type expenses of file, expenses of opening, expenses of maintenance of account, expenses of guarantee…
Compare car loan rates by focusing on the annual percentage rate of charge instead of the lending rate. The APRC includes more fees and gives you a more accurate indication of how much you will have to repay.
How are auto credit rates calculated?
It is the lending institutions that set the auto credit rates. The only constraint imposed is that it does not exceed the usury rate, which is the maximum legal rate that credit institutions are allowed to practice when they grant credit. This rate is defined each quarter by the Banque de France and published in the Official Journal.
To calculate the car credit rate, credit agencies usually take into account your profile, file management fees, competition or different financial indices.
How to find the best rate for a car loan?
Today, there are a multitude of organizations likely to offer you a car loan: banks, credit organizations, car dealerships… So much so that it is sometimes difficult to see clearly and find your way among all offers proposed.
To find the best auto credit rate, the best solution is to use an auto credit comparator like Mandy Warse. After completing some simple information about your project, you access the quotes of different organizations and can compare the proposed credit rates by playing the competition. Ideal to get an idea of the rates offered in the blink of an eye!
Factors to get a better credit rate
Depending on your situation, certain factors may help you benefit from a more competitive auto loan rate. For example :
- An important personal contribution : increasing your personal contribution reduces the amount of the car loan. Logically, the cost of credit also falls.
- Reduced borrowing time : Reducing borrowing time can help you get a better loan rate. On the other hand, you will have to wait in return for larger repayment payments.
- Separate borrower insurance : If you choose to purchase borrower insurance (which is not mandatory), compare the offers independently of your auto loan to compete and find the cheapest.
Be careful to stay vigilant against a particularly attractive auto loan rate. Some are for example reserved for auto loans for very short periods, for example 1 or 2 years. In this case it is necessary to benefit from an adequate personal contribution.