The purchase of a car can be done in two ways: in cash, that is to say that one pays the full amount during the acquisition, or via a car loan. If the first solution seems natural when you have the necessary funds beforehand, opting for a car loan has many advantages.
The advantages of auto credit
• The car loan is adjusted on a case-by-case basis: the repayment period, the interest rate and the amount of the loan depend on the individual who takes out a car loan. The clauses of the contract also vary according to the establishments.
• The repayment of the car loan is made by fixed monthly payment: no need to use all your savings when buying a car.
• The amount of a car loan and the duration of repayment are higher with a car loan than when it is a personal loan, at a more attractive rate.
• The contract stipulates a fixed repayment period, which allows you to organize your finances over the long term. • Unlike buying cash, car credit allows you to take advantage of good borrower insurance that works in the event of an accident, unemployment or death.
• The car loan can be partially or totally settled at any time.
What should you know before taking out a car loan?
• If the financing of the vehicle is equivalent to an amount of less than $ 3,000, car credit is not possible.
• Taking out a car loan is a commitment: unlike cash payment, a loan binds the buyer to the lender. The car will only be in full possession of the buyer when the loan is fully repaid.
• The sum of the car loan cannot be used for anything other than the purchase of the car. The sum lent is exclusively intended for it.
• Administration fees are generally charged when an individual takes out a car loan.
Once you start paying more than 2% or so, it can become pretty dubious whether the cost is actually worth it. Finally, you can’t just take the loan and be done with it. When compared to a 0-2% interest rate on the loan, those returns can be worth it, but only if the money is truly invested for the long-term.