It is quite possible to make a car loan without contribution. In reality, a contribution of money will not change your APR anything.
However, making a contribution to buy a vehicle may affect the acceptance of your credit application by the lending organization. It is obvious that a bank will always welcome the request for credit from a borrower who already has the cash to pay part of the price of the car.
Financing of all or part of the vehicle
It is quite possible to finance only part of the vehicle and pay the residual value at the end of the credit contract. The residual value can range from 30 to 40% of the amount of capital borrowed. Note that this formula is particularly interesting for people who have to change vehicles every 4 or 5 years. We will come back to this very interesting formula in our next article.
Other important points for financing your vehicle
New or used car financing?
Car finance is a special type of loan that meets specific rules. Thus, you can only buy a vehicle registered in Belgium or Luxembourg. You must provide the purchase invoice and your lending organization will pay the garage directly that sells the vehicle.
The APR is different depending on whether the vehicle is new or used . A vehicle is considered new up to 3 years after the first entry into service. The APR is lower for new vehicles. This pricing depends on the market.
The conditions of auto financing
There is no limit on the amount of auto financing and the duration of repayments is generally 4 to 5 years but can be up to 7 years in some cases.
Financing a used vehicle between individuals?
In Belgium, car financing is no longer accepted among individuals. In this case, the person buying a used vehicle from an individual must make an installment loan. The Taeg is more advantageous for car financing than for an installment loan because the vehicle sold by a garage is accompanied by guarantees specific to professional sellers (some garages guarantee the used car up to 4 years).
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