Very cheap car loans can be expensive

Car sellers have been trying to appeal to consumers in recent months with a seemingly cheap car loan. However, it is wise to take a good critical look at this, since in a number of cases there seems to be a good offer, which ultimately turns out not to be 100% true. The car loans are an important lure for buyers. The interest rates are extremely low this year, since it is quite possible to pay between 2.5 and 3.99% interest, lower than ever and 1% lower than last year. See for an observation


Low interest and a quiet quarter

Low interest and a quiet quarter

The low interest rate is easy to explain, since the Lenders Bank’s basic interest rate is extremely low at the moment. In addition, the last quarter of 2012 was particularly calm when we look at consumer credit. The financial institutions have a relatively large amount of liquid assets at their disposal and would like to use them to make a little more return. By reducing interest rates, people try to convince more consumers. Note, however, that you try to supplement the low interest rates with other income, since the return on the loans is actually too low.


Cost of a loan

Even a low interest rate of 2.5% cannot prevent a loan from costing money, which will increase the price of the car compared to the fixed price for which it can be purchased immediately. According to Marie Linemont, vice president of the Union Professionelle Courtiers Crédits, an interest rate of less than 3% is actually too low, since a loan is no longer profitable. This means that credit providers will look for other options, in order to ultimately obtain sufficient income and remain profitable.


Discount on interest

interest rate

Lenders do not have the option to oblige you to purchase an additional product such as a debt balance or comprehensive insurance. However, that does not mean that they can offer you a discount if you decide to do so. In this way, they reward willing customers and try to ensure that you ultimately ensure the return that they are looking for. So make sure you get the discount on the interest, without having to purchase additional products. Only in this way is it possible to take out a cheap car loan, without regretting it later.

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