The race to the 2017 Brussels motor show has started. Best Bank has reduced the minimum APR on car loans to 1.39% as of December 1, 2016. This super low rate for financing new cars applies until 16 February 2017, which covers both the motor show period – 14 to 22 January 2017 – and the decisive weeks thereafter. With this annual cost percentage, Best Bank sets a new in-depth record on car loans. The lowest quoted rate for this was in books, with an APR of 1.44% and other financiers will, moreover, still have a move before the motor show.
A car loan is almost free
Consumers who traditionally take out a loan to buy a new car currently have little reason to complain. With 1.39% APR, a financing of 15,000 dollars with a duration of 4 years only requires 9 dollars in costs to be paid each month. For comparison: a JKP of 6% has a monthly price tag of 40 dollars. Around the turn of the century, such a rate was still highly recommended. With the current minimum APR of Best Bank you in fact only pay off the borrowed capital. In the above-mentioned example, this amounts to 313 dollars per month, bringing the total monthly repayment to 322 dollars.
Where are the hidden costs?
We Belgians naturally look suspicious of offers that seem too good. There will always be a snake. But in the current credit climate, low rates are generally not stunts. Many banks are literally stuck with savers’ money. If they do not lend the capital, they now have to pay a 0.4% fee to park it at the Lenders Bank.
However, when entering into a car loan you may be alert for some combination constructions. With a super cheap car loan, are you obliged to take out the insurance each year through the financier? With such a link you will have to check if the Omnium offered is not more expensive than normal and if you can enjoy the increasing premium discount for damage-free driving during the term of the loan. Another possible combination concerns the trade-in of the current car for the financing of a new one. Here too you should check carefully that you get the maximum price for the old car.