You are therefore in a strong position to negotiate your auto loan if you rely on this competitive market. Dealer, banking institutions, credit organizations, online collaborative credit platforms carry out simulations and request quotes, in order to present them to the various players involved and find the best loan rate. In this case the title loans will come to great use.
Compare the different credit offers to play against the competition
In order to get the best rate for your car loan, putting the various proposals obtained in competition is a technique that works:
- Financial organizations, in particular banking establishments, do not appreciate their consumers signing elsewhere.
- Therefore, do not hesitate to make requests to various establishments.
- If a credit institution submits a more interesting offer to you than your usual banking institution, contact the latter to ask it to make a better credit offer or to align itself… it will make a gesture, if it has the possibility.
To best assess the different proposals received, compare them taking into account the TEG (overall effective interest rate), which includes the administration costs – which generally increase when the interest rate decreases but also the stamp costs. as well as the borrower insurance rate.
In your negotiations with car dealers, an important argument to bear in mind is the discount on the car, which is often very interesting: in fact, in the face of competition, dealers may have to reduce interest rates by consistent manner.
Make a personal contribution to obtain better interest rates
All establishments will offer you 100% financing for the purchase of your automobile. Nevertheless, it is better to have a personal contribution equivalent to 10% or 20% of its purchase price.
A personal contribution will allow you to have a better interest rate from your lender. Note that depending on your financial situation, it is however quite possible to take out a loan without personal contribution and obtain a competitive rate.
In addition, the repayment period of your credit is automatically reduced: the final cost of purchasing the automobile which is the amount of the loan to which is added the interest will then be lower.
Change the repayment term to reduce the total cost of borrowing
The loan term most often offered ranges from one to five years (sometimes even longer).
By reasonably calculating your monthly repayment capacity , based on your income, establish with your advisor the shortest repayment schedule possible. The shorter the period, the lower the total cost of borrowing.
In addition, interest rates for twelve to twenty-four month loans are often the lowest. Advantageous rates are also offered from time to time by credit institutions for short-term loans.
Namely: a new car is an asset that quickly loses value. Insurers halve the value of a vehicle over three years old.
On a short-term commitment, you will then have the option of not having to subscribe to the so-called “replacement value” guarantee of your credit insurance contract, which will allow you to significantly reduce the cost.