While consumer credit tends to stagnate in recent weeks, auto credit is doing, it, rather well if we believe the latest figures provided by the ASF (Association of financial companies). New car financing (all types of loans combined) rose 6.1% year-on-year.
Auto credit, what is it?
It is a consumer loan, but is not defined by the Consumer Code. In other words, auto loan is a trade name behind which lending institutions usually offer an assigned loan or a personal loan.
Classic auto loans at half mast
If we look at the ASF figures, we can see that the appropriations allocated are down (-4.8% compared to last year in the corresponding period). The credits allocated? These are loans related to a specific good or service.
For example, an auto earmarked credit is attached to the financing of a car, it can not finance another property. In terms of benefits, you usually have a higher auto credit rate than an unrestricted consumer credit (such as a personal loan). You are also protected: you pay no monthly payment if the property is defective or not delivered.
The decline in appropriations is therefore real in October, but if we look closely at the figures for auto financing, we see that the trend is less clear. Admittedly, the credits allocated for new cars fell by -22%, but production remains largely positive in the used car sector (+ 9.1%).
You do not know which auto loan to choose? Think about conducting car loan simulations to find out which financing is the most interesting.
LOA continues to rise sharply
LOAs (rentals with purchase option) continue to grow strongly (+ 24%), in particular car LOAs (+ 25.7%). It is interesting to note that in terms of production, the LOAs are now equal to the appropriations allocated for auto financing: 500 million euros in October for the car loans, compared with 486 million euros for Automotive LOAs. Sign of the times, the difference was greater one year ago: 534 million euros, against 386 million euros.
For the record, the LOA is a financial solution to rent a property (car, equipment), then buy it permanently at the end of the rental period for the payment of the residual value.
If you hesitate between LOA and auto credit, know that each solution meets a need. The Credither guide helps you in your choice.