What is the cheapest car loan, whether it is a new or used purchase? We are going to review the different ways to get car credit. We can then use our auto credit comparator to illustrate the cost differences between different lenders.
Auto credit: which is cheaper?
There are different players capable of offering car credit:
- Credit organizations
- The banks
- All dealers
- Resale sites such as Aramisauto
Good to know: organizations require a purchase order for the vehicle to issue a cheap car loan. When it is impossible to provide this document, such as when buying a second-hand vehicle from an individual, it is to a personal loan without proof that we must turn.
All of these players offer new or used car credit solutions. Their offers are now concentrated around LOA (rental with option to buy). This consumer credit concentrates more than 75% of the financing of new cars.
But is this the cheapest car loan? Our opinion on the LOA is without appeal on the subject. Often incorporating hidden costs and a package that is not always suitable, LOA is on average always more expensive than a conventional car loan.
To find out more: LOA, classic car loan or LLD: which is the cheapest?
Comparison of car loan rates
The APR rates for auto credit vary widely from one lender to another. Let us use our comparator to illustrate it, through a car loan simulation of $ 15,000 over 60 months.
|Auto loan $ 15,000 over 60 months||Fixed APR rate||Monthly fees||Total cost of credit|
|Cheapest credit||2.80%||267.96 $||1077.60 $|
|Most expensive credit||5.77%||287.37 $||2242.20 $|
The cheapest credit generates in our example twice less interest than the most expensive, namely one fifth of our comparator. The most expensive credit is however offered by a well known consumer credit specialist. This quick comparison shows the value of an auto loan comparator.
The advantage of our comparator: it is possible to obtain an immediate response in principle, for any request for new or used car credit. Our comparator is indeed connected to the best credit organizations. Based only on the APR rate, our ranking allows us to immediately question the three best organizations. A positive opinion (acceptability> 50%) triggers a confirmation of the request by email, within 24 hours. All these steps obviously do not commit to anything.