My new car, my choice of finance

Congratulations on your purchase of a new car! You would like to opt for finance, but you are still unsure about the package. These details will make your decision easier.

• An instalment loan: a fixed term and a fixed monthly payment. No down payment required and you can include TMC and TC. This is an interesting option if you do not have any equity, but its rate is often higher.
• The balloon loan: its success is growing with people who like to change models on a regular basis while remaining with the same make. The aim is to reduce your monthly repayments. To do this, you will have to pay a larger deposit. A mileage is defined and must be respected. The last monthly payment (the balloon) is calculated at between 30 and 50% of the purchase value of the vehicle. You then have the choice at the end of the contract: either pay for everything and become the owner of your car, or return it and go back to financing with the risk of ending up in a spiral.
• Hire purchase: you will find this is a mix of the first two offers. You pay a deposit of at least 15% of the purchase price and then the fixed instalments until the end of the specified period. The rate is often lower.
• Private lease: you rent the car for a fixed period and mileage and pay a fixed monthly payment. You can include taxes, insurance, maintenance, etc. Please note that at the end of the lease, you must return the car in good condition, any damage may be charged to you.

• Banker: your usual adviser, you have a relationship of trust and they know your situation.
• Dealership: everything will be settled with the dealership, sometimes with a promotional offer, such as during a trade fair or linked to a model.
• Online: you can compare easily, you will get a quick response but no preferred contact person. A good basis if you want to negotiate with your banker or dealer.

For easy comparison, use the APRC (Annual Percentage Rate of Charge). It is expressed in % and includes absolutely all the costs associated with the case. It is illegal to ask for others. The APRC varies according to the amount borrowed, the term and organisation. Some websites help your choice by letting you compare different offers, e.g. www.topcompare.be - www.guide-epargne.be - www.credit-auto.be - www.simulationpret.be. Some organisations also offer more attractive rates for cars with low CO2emissions.

• At the dealership, only mention finance once you have negotiated the offer to acquire and take over your old vehicle.
• Mention a suspensive clause relating to the granting of credit on the purchase order for your new car. This will be useful if your loan is not granted.
• Compare offers, but be careful, always use the APRC. Do not compare a monthly rate with an APR; the calculation will be incorrect.
• A 0% rate sometimes hides other conditions (less discount, omnium, etc.).
• You can take out insurance to cover unforeseen hitches (illness, loss of employment, etc.).
• You have 14 days to cancel your credit by registered letter.
• You should be aware of the general terms and conditions, as with any contract.