Until today you can take out a car loan at a reasonable price. But how much can you save by comparing loans?
Those looking for a new car usually wait at the motor show to pick up a bargain. The private lender also comes across the bridge with favorable rates for a car loan. But even outside the event, it is still advantageous to take out a car loan. Due to the low-interest rates and the fierce competition between lenders, it remains relatively cheap to take out a car loan today. For example, the financial institution credit recently lowered the interest on a car loan from 1.79 to 1.39 percent. The Walloon lender thus joins the list of lenders that lowers interest rates below 1.5 percent.
Although there are a number of players who come up with even cheaper rates. Private lender traditionally remains the cheapest player on the market. During the motor show, the private lender launches the sharpest rates on the market, but also outside the car season, the private lender leaves the competition behind. Who today concludes a car loan with a private lender pays 1.29 percent interest. That is 1 basis point cheaper than a private lender.
The other three major private lenders complete the top three, each with an interest rate of 1.35 percent. That’s a pretty big difference with the more expensive players on the market. For example, a private lender, the most expensive player in our comparison, asks for an interest rate of 2.5 percent. View all car loans on the market here.
Price difference car loan
But how much can you save exactly by choosing the cheapest player? A study by private lender shows that last year the Belgian borrowed an average of 16,702 USD for a car. He opted for a reimbursement period of 54 months.
For our comparison, we assume a situation close to that of 2016. Suppose you borrow 15,000 USD today and repay that amount within 60 months, you pay 258.23 USD a month at the private lender. At the end of the ride, the private lender raises 493.80 USD in interest. That is 5 USD less than what private lender would earn from that loan.
Anyone who takes out the same loan with a private lender sees the price tag of his car financing tightly. You pay 266.02 USD a month with that private lender. At first glance, a negligible difference compared to private lenders. But if we look at the interest, we see that the Humpty Dumpty has earned 961.20 USD from the car loan after 60 months. That is 467.4 USD more than the private lender gets