When a person considers buying a car in installments, financing the purchase at the dealership itself is usually the first option that comes to mind. And it is that it is the most comfortable method: you can sign the sale and the credit in the same establishment and it is not necessary to visit the offices of several banks to present the relevant financing applications.
Dealers, however, usually offer worse conditions than conventional financial institutions: higher interest and a high formalization commission. For this reason, according to the HelpMyCash.com banking comparator, it is always advisable to explore the car loans marketed by banks and financial credit establishments, whose prices are usually much more competitive.
1. The Cofidis Personal Automobile Loan
From the comparator, for example, the conditions of the Cofidis Personal Automobile Loan stand out, which is the cheapest on the market to finance the purchase of a conventional car. This credit, which is worth both to purchase a new vehicle or a second-hand vehicle, has interest from 5.25% TIN (5.38% TAE) and does not include formalization commissions, that is, for opening or study.
Cofidis offers to lend up to 60,000 euros to finance the entire purchase of the car, with a repayment term of between one and eight years. Unlike conventional banks, this financial credit establishment does not require you to be a customer to be able to sign your loan or contract other products such as accounts, insurance, cards, etc.
2. The Ibercaja Car Loan
The silver medal in this particular ranking goes, according to HelpMyCash, to the Ibercaja Car Loan, which can also be requested to finance the purchase of a new or second-hand vehicle. Like Cofidis, this entity does not charge formalization commissions either, although it applies a slightly higher interest rate: from 5.90% TIN (6.35% TAE).
With this credit you can get up to 75,000 euros to finance 100% of the price of a car, to be repaid within a period of between one and eight years. To contract it, it is necessary to be an Ibercaja client and, in addition, you must open an account to pay the fees (if you do not want to use one already open for this purpose), the maintenance cost of which is 60 euros per semester.
3. The BBVA Car Loan
The BBVA Car Loan is also one of the cheapest in this area. Its interest rate is from 6.45% TIN (6.81% TAE) for vehicles less than three years old and from 7.70% TIN (8.14% TAE) for cars over that age; always without opening or study commissions.
BBVA can lend a maximum of 75,000 euros to finance the entire purchase of the vehicle, with a term of between two and eight years. As is the case with Ibercaja, to contract your car loan it is mandatory to have an open account with the entity. Likewise, if the salary or pension is not domiciled, the interest applied increases by one percentage point.
You have to compare options and do numbers
Dealers, as a general rule, offer financing at a price higher than 8% APR and charge a formalization commission of around 2% or 3%. However, they also usually offer discounts on the price of the vehicle if it is purchased in installments with any of their financial instruments, which can pay off in the long run.
For this reason, from HelpMyCash they advise exploring all the options: request financing both from the dealer and from banks and financial credit establishments. In this way, the client will be able to do the numbers and assess with which entity they will pay less for both the vehicle and the contracted loan.