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finance the purchase of your used car?

How to properly finance the purchase of your used car?

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That’s it ! You have finally found the used vehicle of your dreams. Follow our advice to properly finance your new purchase. You do not have the total amount available, it does not matter! There is a solution: credit. As common for the purchase of a new vehicle as for a used vehicle, here is a selection of the offers available.

What is classic credit?

This is the ideal credit for loyal buyers, who keep their car for 5 years or more. It is also the most practiced credit on the market. It is offered by many financing organizations, from banks to credit institutions, through the financial subsidiaries of car manufacturers and other independent financial companies.

Note that the cost of acquiring the vehicle, the rate, the repayment period, the amount of the monthly payments as well as the total cost of the credit are fixed upon signing the loan contract. You are free to set the duration of your credit repayment, generally from 1 to 5 years, sometimes 7 years in more specific cases, to plan your budget as well as possible.

Even if the lending institutions can finance the entire amount, it is strongly advised to make a personal contribution of at least 20% .

What are the advantages of a personal contribution of at least 20%? The possibility of obtaining a more interesting interest rate as well as a reduction in the amount of the loan, consequently a lower final cost of acquisition of the vehicle.

On the other hand, if you are the victim of destruction or theft of the vehicle during the reimbursement period, the sum which will be reimbursed to you by your insurer will allow you to settle your credit. Except in the case of 100% financing, you may on the contrary have to repay the rest of the capital.

What is leasing? (or rental with option to buy)

This is the ideal loan for those who change their vehicle regularly, approximately every two years and who do not want to worry about reselling their vehicle. With the leasing you can monthly pay all the costs related to the use of the vehicle.

This credit makes it possible to determine the redemption or trade-in value of the vehicle as soon as the contract is taken out. At the end of the financing period, you simply return the vehicle without worrying about what happens next. If you have subscribed to a purchase option rental, you will be able to recover the security deposit that you paid at the start of the contract. The operation can be renewed for each new vehicle and each new financing.

If you decide to keep your security deposit, you will subscribe to a contract including a take-back commitment. This clause then saves you the payment of the last installment. In reality, this last monthly payment will correspond to the difference between the price of the car and what you have already paid throughout your rental.

What is the report credit?

You fell in love with a beautiful Italian, but you haven’t sold your old car yet, and you’re running out of funds. This is not a problem ! You can take out a bridging loan to replace the down payment you need for the new vehicle.

This credit corresponds to the market value of your old car. So you get extra time to sell it, and who knows, maybe get a better price!

Another advantage: by combining your car loan and a bridge loan, the amount borrowed may be higher than expected and you will therefore be able to obtain a better rate. This will allow you to stop your bridging loan before the initial date when you have sold your old vehicle. You will then have the car loan to cover, but at the preferential rate obtained!

In these so-called “packaged” formulas, you can benefit either from a reduction in the credit rate (around 0.50%), or from a discount on insurance (a few months free). The main advantage of these offers is that you subscribe to all these contracts at once, to a single organization. So less paperwork, less wasted time.

Unfortunately there are no standard “packaged” offers. Each offer is different. Remember to compare them carefully before making your choice and to check their content carefully, so as not to miss out on any advantage!

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