Buying a car: which type of credit to choose?

After real estate, the purchase of a car represents the second line of budget for which one generally subscribes a loan. Cars are more and more technological, better and better equipped, but also more and more expensive, which is why it becomes difficult nowadays to pay cash for such a purchase. Credit is the best way to finance a new or used car. Different options are available to us, which one to choose?

Auto credit

Auto credit is definitely the best financing solution for buying a car. It is a so-called “assigned” loan, which means that the money obtained can only be used to finance the purchase for which the loan is contracted. Generally lasting from one year to five years , the repayment period can be extended to seven years for new vehicles. Auto credit has several advantages. It provides some protection for the borrower because: – the borrowed money can only be used to finance the car in question; – the sale is canceled if the loan is not obtained; – it is not possible to borrow more than the value of the vehicle. Clearly, the purchase of the

Good to know: To avoid continuing to pay for a vehicle that you may not have after a few years, it is advisable to take out a shorter loan for a relatively older used vehicle.

The personal loan

This mode of financing is a loan for consumption. It does not link you to a particular purchase . You can somehow do what you wish with the money you borrowed. With repayment durations that are essentially the same as for car loans, the personal loan makes it possible to finance all kinds of purchases. Holidays, furniture, works, but also a car. If you want to buy a car, know that you can borrow more than the price of the car, to finance some services such as insurance or major upcoming interviews, or cumulate two different purchases. But be aware that this type of credit is not allocated to a particular purchase, you will be forced to repay your credit even if the sale is canceled .

Good to know: The personal loan presents a risk of over-indebtedness higher than that of the car loan.


Called often ” leasing ”   or LOA (Lease with Purchase Option), leasing is a means of financing to acquire a new or recent car for rent defined in advance . With this method of refinancing, you do not own your car, but you will have the opportunity to become a final monthly payment to settle at the end of the contract, unless you decide to simply return the vehicle. Leasing has the advantage of being able to change cars regularly while continuing to pay rents. Please note that if you return a car in poor condition, you may be charged for damages and repairs to be made in case of damage.

Good to know: Car maintenance can be included in your monthly payments. You will not have to worry about this detail during the contract period.

For consumers wishing to become owners of their car, auto credit seems to be the ideal mode of financing because it has the advantage of being unsurprising . The money borrowed is used only to finance a vehicle for which a purchase order is established beforehand. In addition, the sale is canceled in case of non-obtaining. Bringing greater freedom, the personal loan leaves the choice to the borrower to dispose of the money as he sees fit, at the risk of having to pay for a vehicle that he may never have bought. Leasing is for drivers who are not concerned about ownership. It can be interesting too.

Key points to remember: – Auto credit is the one with the least risk. – Make sure you are able to repay your bills. – Adjust the loan term to the age of the vehicle.

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