Going through an online car loan comparator should simplify the process of finding the best rate. But not all auto credit comparators are created equal, beware. On the other hand, to find the best car loan, you have to differentiate between the loans offered by large specialized organizations, banks and that of dealers.
And why an online car loan? Because online credit provides an immediate answer in principle . We can therefore know what rates the banking organizations are really ready to grant. For this, we will address the following subjects:
- How to recognize a good online car credit comparator?
- Differentiate between proposed and accepted rates
- How to negotiate a credit with the bank or the concessionaire?
How to recognize a good online car credit comparator?
The most important point that differentiates good credit comparators from dream sellers is the ranking criterion. Indeed, many online credit comparators do not clearly show the criterion by which they rank the offers of credit agencies. And for good reason, their only interest is that the customer’s request brings them a maximum of money . And not necessarily that their client gets a cheap car credit rate . There are some who do even better by not even offering a classification at the end of the file entry and automatically orienting the file where it suits them!
Difficult under these conditions to trust an online car credit comparator. To remove as many doubts as possible, we advise you to make sure that the car loan rate offered is a fixed APR rate . And that it offers a specific rate not a rate range. Indeed, this is the legal rate that the Consumer Credit Law imposes on all organizations in matters of credit communication. It includes all costs, including administration fees if there are any.
Our online auto credit comparator is based on this fixed APR rate. But as we detail in this video, this is not the only criterion to take into account.
How to actually get the best rate from an online car loan?
Once you have passed the step of finding an online car loan comparison based on the fixed APR rate, you have to make the difference between being able to see a ranking and knowing if you are eligible for the best rate . Which can be very different when it comes to online car loans. Indeed, credit organizations may tend to offer promo rates to attract many customers but only accept the best files to keep their margin.
If a promotional rate offer is offered, the credit organization will see its margin decrease. But unlike other sectors, in credit it is possible to compensate for this loss of margin by increasing that on credit risk. Indeed, financial companies estimate a medium level of risk for all files. This risk ultimately corresponds to a loss for them. To minimize this loss, it is enough that they only accept good files and the margin is kept.
To prevent customers from getting caught in this system, our exclusive credit questionnaire provides a real-time response in principle from the cheapest credit organization. If the file does not pass, it is possible to query the second and third best rates. We are therefore an online car loan comparator which allows us to obtain a ranking of the best rates but which also allows us to know at what rate each application can be accepted.
What is the point of going through an online car loan comparator?
Whether it is for a used car loan or to finance the purchase of a new car, it is legitimate to know what there is to gain by going through an online car loan comparator. It seems best to give a concrete example. Let us take the hypothesis of the purchase of a new car in the amount of 10,000 USD (a contribution having been made by the recovery or sale of the old car) for a reimbursement period of 60 months.
Least expensive fixed APR rate: 2.89% monthly payment: 179.03 USD cost of credit: 741.80 USD
Most expensive fixed APR rate: 6.63% monthly payment: 195.36 USD cost of credit: 1,721.60 USD
Or almost 1000 USD more for exactly the same credit! This is what an online car loan comparator can avoid!
NB: New car loans and used car loans do not have quite the same rates. Those of the new car loan are a little cheaper (simply related to the fact that a new car has more value on average and can be seized in the event of reimbursement problem). But to get a new car loan, you will need to provide proof of purchase.
Compare dealer and bank rates
Credit agencies are not the only ones to offer car credit . We must also consider the offers of dealers and those of banks.
Car loan from banks
Banks are not really specialized in consumer credit. Their main fault is that they have not developed an approach to acquire new customers for this product. The consequence is that they are only able to grant credits to known customers and to the best of them. The second defect generated by this non-specialization is that they only offer attractive rates too rarely.
Conclusion, to get a good car loan from banks, it is better to be a good customer, sufficient old, and more … We have nevertheless set up a negotiation method for those who think they can get a good offer from their bank.
Dealer auto credit
Even if their rates are rather more expensive than those of specialists throughout the year, when credit promotions are offered, it is difficult to do better. In particular with auto credit at 0% rate. You can go through our online car credit comparison, impossible to beat this offer.
Be careful not to neglect the negotiation of the price of the car in this case! Because we estimated that a free credit was equivalent on average to 7 to 8% discount on the price of the vehicle. And the seller may be reluctant to make a move while the rest of the year, it may be that the reduction on the car was 15%!
Dealers’ credit, which cannot be integrated into our online car credit comparator, since their rates are not on the net, is nevertheless the subject of our negotiation technique.