The different types of car loan in 2025
There are several types of car loans available in 2025, each with its own advantages and disadvantages:
Classic car loan: This type of loan is used to finance the purchase of a new or used vehicle. It can be with or without a down payment, and interest rates vary according to your credit profile and loan term.
Leasing auto : Le leasing est une option de location longue durée avec option d’achat. Il permet de rouler avec un véhicule neuf ou d’occasion pour une durée déterminée, généralement entre 2 et 5 ans. Les mensualités sont généralement plus basses que celles d’un crédit auto classique, mais vous ne deviendrez jamais propriétaire du véhicule à moins d’exercer l’option d’achat.
Car loans for electric vehicles: With the transition to more environmentally-friendly vehicles, many lenders are offering special loans for electric cars. These loans can benefit from ecological bonuses and conversion bonuses, which reduce the total cost of the vehicle.
Revolving car credit: This type of credit allows you to renew the financing of your current vehicle in order to buy a new one. It is often used for used vehicles, and allows you to take advantage of attractive interest rates.
How can you get the best rate for your car loan?
Getting the best rate for your car loan requires good preparation and an understanding of the factors that influence interest rates. Here are a few tips:
1. Improve your credit score
A good credit score is essential for obtaining a favorable interest rate. You can improve your score by paying your bills on time, reducing your debt and avoiding opening new lines of credit.
2. Compare offers
It's important to compare offers from different lenders to find the best rate. Use online credit simulators to get quotes and compare interest rates.
3. Make a downpayment
The more money you can contribute to the purchase of your car, the less you will have to borrow, which will reduce the total amount of interest paid.
4. Choosing the loan term
The loan term influences the monthly payments and total interest paid. A shorter loan means higher monthly payments but lower total costs, while a longer loan reduces monthly payments but increases total costs.
5. Negotiate with the lender
Don't feel obliged to accept the first rate offered. Negotiate with the lender to obtain a more favorable rate, especially if you have a good credit score and a substantial down payment.
Car credit or leasing: which is best for you?
When it comes to financing your car, there are two main options: car loans and leasing. Each of these options has its advantages and disadvantages, and the choice will depend on your personal situation and preferences.
Car loan:
- Ownership: With a car loan, you become the immediate owner of the vehicle, enabling you to resell it at any time.
- Loan term: Car loans can vary in length, generally between 12 and 60 months. According to data from the Association Française des Sociétés Financières (ASF), the average duration of a car loan is 47 months.
- Overall cost: Car loans can be more economical in the long term if you plan to keep the vehicle for several years. You pay interest, but once the loan is repaid, the vehicle is yours with no further monthly payments.
- Flexibility: You have the freedom to personalize and modify your car as you see fit.
Leasing (location longue durée ou crédit-bail) :
– Coût initial réduit : Le leasing nécessite souvent un faible apport initial, ce qui peut être plus accessible financièrement.
– Entretien inclus : Les contrats de leasing incluent souvent l’entretien et les réparations, ce qui peut simplifier la gestion du véhicule.
– Renouvellement facile : Le leasing permet de changer de véhicule tous les 2 à 3 ans, ce qui est idéal pour ceux qui aiment conduire des voitures récentes.
– Coût total plus élevé : À long terme, le leasing peut coûter plus cher que l’achat, car vous n’acquérez jamais la propriété du véhicule. Selon une étude, le coût total du leasing peut être supérieur de 10 à 20 % par rapport à l’achat.
Ultimately, the choice between a car loan and a lease depends on your priorities. If you want to own your car and intend to keep it for a long time, a car loan is probably the best option. On the other hand, if you prefer to drive newer vehicles and benefit from included maintenance, leasing may be more suitable.
Criteria to consider when choosing a car loan
Choosing the right car loan requires careful analysis of a number of criteria. Here are the main points to consider when making an informed decision:
Interest rate: The interest rate is one of the most important factors. A low rate reduces the total cost of the loan. Compare the rates offered by different financial institutions to find the best rate. According to Banque de France data, the average rate for a car loan in 2023 was 3.5%.
Loan term: The term of the loan influences the monthly payments and the total cost. A shorter loan means higher monthly payments, but lower total costs due to the interest paid over a shorter period.
Personal contribution: A personal contribution reduces the amount borrowed and therefore the interest. The larger the down payment, the lower the total cost of credit.
Additional costs: Take into account any application fees and other ancillary costs. Some banks charge fees that can increase the total cost of the loan.
Assurance emprunteur : Cette assurance couvre le remboursement du crédit en cas de décès, d’invalidité ou de perte d’emploi. Comparez les offres d’assurance pour trouver la meilleure couverture au meilleur prix.
Early repayment terms: Check whether the lender allows early repayment and, if so, under what conditions. This may enable you to reduce the total cost of credit by repaying more quickly.
Flexible monthly payments: Some car loan offers allow you to adjust your monthly payments according to your income. This can be an advantage when your income fluctuates.
Pitfalls to avoid when taking out a car loan
Taking out a car loan may seem straightforward, but there are several pitfalls to avoid if you don't want to end up with unexpected charges or unfavorable terms. Here are the main pitfalls to avoid:
Don't compare offers
It's crucial to compare offers from different lenders to get the best rate and terms. Use online comparators to get an overview of the options available.
Ignore the small print
Read all the terms and conditions of the credit agreement carefully. The small print may contain important information on fees, early repayment conditions and other important clauses.
Underestimating the total cost
Don't just focus on the monthly repayments. Take into account the total cost of credit, including interest and ancillary costs. Use online simulation tools to calculate the total cost.
Accept hidden charges
Some loans may include hidden charges, such as administration fees, borrower's insurance or guarantee fees. Make sure you are aware of all associated costs before signing.
Choosing the wrong loan term
A loan term that is too long may reduce monthly payments, but increases total costs due to accumulated interest. Choose a term that balances affordable monthly payments and reasonable total cost.
Do not check the flexibility of the conditions
Check whether the loan offers the possibility of modulating monthly payments, making prepayments without penalty, or suspending payments in the event of financial difficulties.
Forget the impact on your budget
Make sure that car loan repayments fit into your monthly budget. Use budget simulators to check that you can cover the monthly payments without jeopardizing your other expenses.
Not taking loan insurance into account
Loan insurance is often compulsory, but the cost can vary. Compare insurance offers to find the best coverage at the best price.
The best banks for a car loan in 2025
In 2025, several banks and financial institutions stand out for their car loan offers. Here are some of the best options:
Crédit Mutuel: With loans of up to €50,000, Crédit Mutuel offers attractive terms, including free administration fees for amounts from €6,000. Their customer service is renowned for its efficiency and availability throughout the financing process.
Crédit Agricole: Crédit Agricole offers fixed-rate amortizable personal loans, repayable over 12 to 120 months. Loan amounts range from 1,500 to 50,000 euros. Their online credit simulator is a valuable tool for estimating the total cost of financing.
Société Générale: Société Générale offers the Expresso car loan, an amortizable loan with adjustable monthly payments and no down payment. The loan is available from 1,000 euros and repayable over a period of 12 to 84 months.
Automotive market trends in 2025 and their impact on car loans
The automotive market in 2025 will be marked by a number of important trends that will influence car loans:
1. Increasing demand for electric cars
2. Increased vehicle technology and range
3. Fixed-rate loans due to economic uncertainty
4. Loans with no down payment increasingly popular
Car loans for electric cars: what you need to know
Car loans for electric cars have their own special features. Here are some key points to know:
Electric cars are often more expensive than their internal combustion counterparts. This means that car loans for these vehicles can be larger.
Many governments offer financial incentives to encourage the purchase of electric vehicles, such as grants or tax breaks. These incentives can reduce the overall cost of the loan.
Given the higher initial cost, repayment terms for electric car loans can be longer. This allows borrowers to spread the cost over a longer period.
Banks often offer competitive interest rates for electric car loans to make these vehicles more accessible.
Practical guide: how to obtain a car loan in 2025
Getting a car loan may seem complicated, but by following a few key steps, you can simplify the process and maximize your chances of getting a favorable offer. Here's a step-by-step guide to help you get a car loan in 2025:
1. Assess your financial situation
Before applying for a car loan, it's essential to understand your financial situation. Calculate your monthly income, expenses and repayment capacity. This will help you determine how much you can afford to pay each month for your car loan.
2. Choosing the right type of credit
There are several types of car credit, such as earmarked loans, personal loans and leasing. Each has its own advantages and disadvantages. For example, an earmarked loan is specifically for the purchase of a vehicle, while a personal loan can be used for other expenses.
3. Compare offers from lenders
It's crucial to compare offers from different lenders to find the best interest rate and terms.
4. Prepare the necessary documents
To apply for a car loan, you'll need to provide several documents, such as :
- Proof of income(payslip, tax assessment, etc.)
- Bank statement
- Proof of address
- Employment contract (if employed)
- Passport or identity card
5. Apply for credit
Once you've gathered all the necessary documents, you can apply for credit at your bank or specialist lender. You'll need to fill in an application form and provide the required documents.
6. Evaluate the credit offer
Once you've submitted your application, the lender will evaluate your file and make you a credit offer. Carefully review the terms of the offer, including the interest rate, loan term and additional fees.
7. Sign the credit agreement
If you are satisfied with the offer, you can sign the credit agreement. Be sure to read all the conditions carefully and ask questions if anything is unclear.
8. Remplir les formalités administratives
Après avoir signé le contrat, vous devrez remplir quelques formalités administratives, telles que la souscription à une assurance emprunteur. Cette assurance est souvent obligatoire et couvre le remboursement du crédit en cas de décès, d’invalidité ou de perte d’emploi.
9. Getting your vehicle back
Once the credit is approved, you can get your vehicle back. The lender will give you the funds you need to purchase the vehicle, and you'll begin repaying the loan according to the terms of the contract.
Car Credit FAQ
What's the difference between a car loan in 2025 and a consumer credit?
A car loan in 2025 is specifically intended for the purchase of a vehicle, which means that the funds lent must be used solely for this purchase. In contrast, a consumer credit is more general and can be used for a variety of personal expenses, including but not limited to the purchase of a car.
Is it possible to obtain a car loan in 2025 with a low down payment?
Yes, it is possible to obtain a car loan in 2025 with a low down payment. However, a higher deposit can help you obtain better loan conditions, such as a lower interest rate. Some institutions may require a minimum deposit, so it's important to check conditions with the lender.
Is it possible to refinance a car loan in 2025?
Yes, refinancing a car loan is an option that many lenders offer. It allows you to renegotiate the terms of your current loan to obtain a better interest rate or monthly payments more suited to your budget. However, fees may apply, so it's essential to do the math before making a decision.
How does credit rating affect car loan applications?
Your credit rating plays a crucial role in obtaining a car loan in 2025. A good credit rating can help you obtain a lower interest rate and more favorable loan terms. Conversely, a poor credit rating can lead to higher interest rates and less advantageous loan conditions.
What documents do I need to apply for a car loan?
To apply for a car loan in 2025, you'll usually need to provide several documents, including ID, proof of address, bank statements, pay slips or tax notices, and sometimes proof of insurance. Specific requirements may vary from lender to lender.
How are monthly car loan payments calculated?
The monthly payments on a car loan are calculated according to several factors, including the loan amount, interest rate, loan term and personal contribution. Using an online car loan simulator can give you a precise idea of the monthly payments you'll have to make.
What impact does the age of the vehicle have on obtaining a car loan?
L’âge du véhicule peut influencer les conditions de votre crédit auto en 2025. Les véhicules plus anciens peuvent avoir des taux d’intérêt plus élevés en raison de leur dépréciation rapide et de la diminution de leur valeur en garantie. Les prêteurs préfèrent généralement financer des véhicules plus récents.
What are the hidden costs to watch out for when taking out a car loan in 2025?
It's important to watch out for hidden charges such as administration fees, early repayment penalties, borrower's insurance fees, and other additional costs that can increase the total cost of credit. Read all contract clauses carefully before signing.
