Should we or should not have recourse to auto credit?
To finance the purchase of a new car, should you or should not have recourse to auto credit? Very often, using credit as a means of financing is an obligation for households that do not have sufficient savings to mobilize.
But it also sometimes happens that households with better incomes and comfortable sums aside still use the credit to buy a new car. This means that the conditions of a car loan must have some advantages … in this article, let’s try to see the strengths and weaknesses of this method of financing and ask ourselves the following question: for or against auto credit?
What are the advantages of taking out a loan to buy your car?
If you take out a loan to buy your car, it is possible to borrow up to € 60,000 with a repayment period spread over 6 years for used cars and 7 years for new ones.
The first major advantage of a car loan is the ability to afford the vehicle you want (many models are accessible up to € 60,000) on the condition, however, of having a consistent debt capacity.
Another great advantage of the auto loan offered by banks or specialized organizations is the possibility of starting to reimburse the purchase only when it is delivered.
You may never have had a bad automotive experience, but you are still not immune to a defect, a manufacturing problem or even a concern at the time of the repair. delivery.
IMPORTANT By signing a loan allocated to the acquisition of a vehicle, the repayment of the loan begins when you officially become the owner of the automobile. If you don’t physically have the car, then the credit is canceled.
A car loan brings real freedom by allowing households that do not have the savings necessary to buy a new car to access all the same to a model that suits them (city car, sedan, minivan, 4×4 or sports car) .
This freedom has a cost, with interest that is charged each month and which leads to repaying a larger capital than the amount actually borrowed originally.
However, with attractive loan terms and a low rate, affected credit can be a great way to save some savings and afford a new vehicle!
No need to mobilize all your savings and expose yourself to real difficulties in the event of a health problem or job loss, for example. Credit, when used wisely, helps balance your budget.
What are the disadvantages of acquiring your car with a loan?
A loan is a real commitment on the part of the household that receives the money. A commitment to keep the promise of reimbursement. This means that before subscribing to a credit offer, it is important to check that you have the capacity to repay the sum that will be granted to you on a long-term basis.
The banks carry out complete checks, looking in particular at your income but also your account management.
But it’s also up to you to use credit in moderation! There is a real duty of responsibility of all vis-à-vis the credit, and in particular the credit having financed your car.
First negative point, it can be a tool of destabilizing a household if it is used without restraint. Using credit repeatedly and not in concert can lead to over-indebtedness.
Second negative point of a loan, the cost! As we have already seen, a loan involves interest. It is sometimes possible to take advantage of offers with reduced rates or even a zero rate, but in most cases, you will have to deal with a rate that will lead to the repayment of interest.
Borrowing money therefore entails costs! They can be calculated using the auto loan simulators available online and in particular using the tool offered by Meilleurtaux.com.
Auto credit or not, how to choose?
Difficult to give a definitive answer to this question of whether to be for or against. Some swear by cash payment and refuse any form of credit.
Others, on the contrary, take advantage of the freedom allowed by credit to access goods and services (in our case a car) that are inaccessible by limiting themselves to cash payment. So, it’s up to you to make an informed choice for the purchase of your new car.
Auto credit allows:
- buy a car without having the necessary sum in your bank account at any given time;
- to spread the reimbursement over a period that is consistent with your income, and thus allow you to absorb the cost of your new car;
- keep available savings aside to mobilize in the event of a personal or professional problem;
- to drive in a new car or a used car, according to your needs, and to be able to change it whenever you want.
Auto credit does not allow:
- to buy a car without having debt! Once you have signed a contract, it is binding on you and must be reimbursed;
- to buy a car at no cost! The interest linked to your credit will increase the initial purchase price of your car , whether it is new or used.
Credit is therefore not the most economical solution. However, car loan interest rate are low, most consumer loans do not have an exuberant cost.
These tools are completely free and without obligation, and allow you to obtain an auto credit simulation to finance a new or used car. With these simulators, you can know in advance the monthly repayment installments, and thus assess the financial effort you will have to make if you choose a car loan.
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