Formerly reserved for new cars, the car loan becomes more accessible and now allows you to finance the purchase of a beautiful used car over 2 years old.
Of course, the conditions vary from one establishment to another and the tailor-made offer is used to offer a personalized contract, well suited to the borrower’s needs. Some advice on choosing financing for a second-hand vehicle.
Used car credit: a higher rate?
Compared to new car loan offers, those of financing intended for the acquisition of second-hand vehicles seem more inaccessible. Indeed, we observe much higher interest rates explained by the fall in the residual value of the car.
If the bank can hope to recover the loan money with the seizure of the new car in the event of non-repayment, this is far from being as simple with a used car whose value is no longer attractive because of the haircut. It therefore relies on interest rates to recover as much money as possible, while taking into account the borrower’s repayment capacity.
To hope to reduce this high interest rate for the used car loan, the solution available to you is the personal down payment which will be used to contribute to the purchase of your vehicle.
Fees and obligations related to used car credit
Because a car loan commits you to repay monthly payments during a predefined period, it is better to choose the offer according to your real financing needs and your budgetary possibilities. To do this, start by getting information from garages and individuals who sell the used car you hope to buy to get an idea of the price applied on the market.
Then find out about the total cost of this car loan, namely the amount you borrow and the total amount of interest, application fees and compulsory insurance. Especially since this information is provided to you in detail in the results of the online simulations of your car loan and they will also appear on the answer in principle which will follow from the online comparison.