It is no longer necessary to ruin yourself to buy a new car. Today with auto loans festering in all directions, it is possible to finance a purchase with loans at very interesting rates ranging from 0% to 4%.
These credits are really advantageous for people who earn the SMIC. This allows to calibrate, under certain conditions, the payments according to its monthly budget and its personal situation.
What is the SMIC?
In France, the SMIC corresponds to the mandatory minimum hourly wage. An employer can not pay an employee below this minimum wage. This sum is re-evaluated each year, on the first of January. It can also be changed during the year if necessary.
Since 2001, the value of the SMIC has only increased. In 2001 it was 1127.23 USD gross per month for 169 hours of work, in 2011 1365 USD gross for 151h of work and today it reached 1457 USD gross. This shows that the number of hours worked has decreased but that the SMIC has continued to increase. Credit institutions can make loans to the SMIC if the maximum debt ratio does not exceed 40%.
This is a measure that prevents some people from taking too many credits that they will not be able to repay. To obtain loans to SMIC, it is necessary to borrow a small amount or spread its repayment over a long period to reduce the monthly payments.
Why take a car loan?
Not everyone has the means to afford a new car with its savings. For the richest and the poorest, auto credit can simplify expenses by spreading them over several months.
Even when you have savings, it can be a good solution to not ruin yourself at one time. Thanks to the fierce competition between dealers and car manufacturers, all sellers are now offering loans at really advantageous rates to finance the purchase of the car.
There are loans for all budgets and all situations ranging from zero rate loans to student loans. It’s a way to have greater freedom in the choice of your vehicle.
Take an Auto Credit when you are at the SMIC
As mentioned above, the maximum debt ratio when you are at the SMIC is 33%. On a value of 1150 USD, the person concerned can only refund 379.50 USD per month maximum.
If the person already has other indebtedness in progress, such as a rent or a mortgage, this one counts directly in the 33% of maximum indebtedness. To know your maximum rate, you can go to online simulators that will do the calculations for you. Be careful, you have to be realistic and take into account all future expenses.
This is not because it is possible to go into debt at 33% that you can necessarily afford it. We must also take into account all expenses related to daily life (children, schooling, food …). Once you know your exact budget according to your situation, you will be able to start looking for the best rates.
Free online comparators
At banks as well as at dealerships, there are a large number of different auto loans. To find the best rates, you must go to a free credit comparison on the internet.
You must enter your preferences and budget in the search bar of the comparator to see all the credits that can match you. Then simply choose from the best rates and the best terms of payment.
Some examples of auto credits
Sofinco offers a car loan with a very low rate of 4% for small sums. For a credit of 10,000 USD, it is possible to repay it with monthly payments of 185 USD for 60 months or 204 USD for 54 months.
The Cetelem group has set up a car loan for a new car with a fixed annual rate of 1.00%. This is one of the best rates on the market. For 4 000 USD borrowed, you have to repay 4021 USD over one year, or 335 USD per month. The only constraint is that the credit must be repaid for a maximum of one year.