Best Car Loans For Bad Credit -Signiumtyler.Com Uncategorized LOA, LLD or car credit? Find the cheapest car loan easily

LOA, LLD or car credit? Find the cheapest car loan easily



LLD long-term rental offer

LLD Renault Clio DCI 90 BUSINESS ECO2 offer for 48 months and 60,000 Km: $ 295 / month

This offer includes a Service-maintenance Formula including all wear parts excluding tires and the vehicle warranty for the entire duration of the long-term rental and the Financial Loss Guarantee. Excluding insurance.

Or a total cost of 14,160 USD for the long-term rental offer for a period of 4 years and 60,000 km.

Auto loan offer

Auto loan offer

To be comparable to LOA or LLD over 4 years, our scenario for car credit is the purchase of the Clio with a car loan over 7 years and then the resale of the vehicle after 4 years. The hypothesis of a loan over 7 years makes it possible to have an amount of monthly payment comparable to the rents of the LLD or the LOA, that is to say a monthly payment of 329.07 USD. The early redemption fees of a maximum amount of 1% of the remaining capital have been included in our calculations. Synthetic :

  • Amount borrowed: 20,000 USD at the fixed APR auto loan rate of 5.90% over 7 years
  • Agios paid over 4 years: 3,239 USD
  • Total amount reimbursed: 15,795 USD
  • Capital remaining from: 7,444 USD
  • Estimated amount of resale of the car: 11,343 USD.

We applied the classic depreciation curve of the Argus, adapted from a resale between individuals (-20% the first year, -10% the following years and 7% thereafter)

After the prepayment of the car loan and the payment of the prepayment costs, you will have: 11 343-7444-150 = 3749 USD.

The estimated cost of maintaining a Clio per kilometer $ 0.0142. Or an amount of 852 USD for 60,000 kilometers in 4 years.

In the end, you therefore have: 3749-852 = 2897 USD which are to be deducted from the 15795 USD of credit that you paid during the first 4 years.

Or a total cost of 12,898 USD for the car loan offer for a period of 4 years and 60,000 km. You can find the best car loan simulations on our auto loan comparator.

Rental offer with LOA purchase option

Rental offer with LOA purchase option

For a Clio of 19,450 USD and for a period of 48 months BUT only for 30,000 Km, the offer is 304.16 USD per month with an option to buy 8,171 USD after 4 years. (our estimate of the value of the car after 4 years is 11,343 USD). This is the best offer for our car or rental credit comparison.

Or a total cost of rents in 4 years of 14,600 USD. It is important to note that we have chosen an LOA without intake, which is increasingly rare. Because to minimize the risk of non-payment and to show a smaller monthly payment, the amount of contributions on LOA have exploded in recent years.

In the case of an LOA, maintenance is at your expense, for 30,000 km, our estimate is 426 USD (the estimated cost of maintaining a Clio per kilometer 0.0142 $).

A total cost of 15,026 USD for the rental offer with option to purchase for a period of 4 years but only 30,000 km. You can see for yourself on the Renault website.

Summary: car credit is cheaper than an LLD and less expensive than the LOA

Our study speaks for itself:

  • LOA: cost 15,026 USD for 4 years for 30,000 Km
  • LLD: cost 14,160 USD for 4 years for 60,000 km
  • Car loan: cost 12,898 USD for 4 years and 60,000 km

Auto credit is therefore by far the cheapest!

LLD long-term rental – Leasing

LLD long-term rental - Leasing

The principle of long-term rental LLD

Long-term rental or LLD, also called leasing, is based on the principle of pure rental. That is to say that at no time is it planned that you become the owner of your car (or any other vehicle). The principle of long-term rental is to subscribe to a contract for which you will have rents to pay each month. These rents include the rental of the vehicle (use of the vehicle), insurance, maintenance or even repairs. Rental formulas are much less easy to understand than car credit because communication is less transparent as indicated by the law on consumer credit. So LLD or car credit is totally different from a financial point of view.

The amount of the rent for the long-term rental (LLD or leasing) depends on the price of the car, the level of service chosen (insurance – assistance – maintenance), the number of kilometers traveled, the duration of the rental with option of purchase (between 2 and 4 years in general) and the discount curve of the vehicle.

A small warning seems important to us. At the end of your long-term rental, make sure that your vehicle is faultless or otherwise you may be charged repair costs which may be higher than if you do it yourself and which constitute hidden costs of long term rental. This is still one of the major differences between rental and car credit.

In the event of default on a long-term LLD rental contract

If you do not pay certain rents for your LLD long term rental, you will have penalties like on a car loan. If you no longer pay the rent on your lease at all, the vehicle will be recovered, you will have to reimburse the late rent and pay in addition to the penalties.

If you can no longer pay your rents for your long-term rental, there are companies and websites specializing in leasing transfers. You will transfer your vehicle to someone else as well as your LLD contract and its monthly payments.

The reality of the costs of an LLD long-term rental contract

Reminder of the principle of a long-term rental contract: unlike a car loan, you will never own the vehicle, even at the end of the rental, unlike a rental with an LOA purchase option for which you can decide to exercise the purchase option (pay the remaining balance) to become the owner of your vehicle. At this point, auto credit and LOA meet and not the LLD.

Summary of what you pay as part of a long-term LLD rental or leasing through your rent:

  • Use of a vehicle for 2, 3 or 4 years included in the rent
  • insurance / assistance for this vehicle for 2, 3 or 4 years included in the rent
  • maintenance of this vehicle for 2, 3 or 4 years included in the rent

Today, all this data is readily available:

The purchase values ​​of vehicles (even with average discounts) are public, the Argus coast is known (and is easy to adjust according to what you can see on the right corner), the price of insurance is known and we can easily estimate the cost of car maintenance.

We therefore evaluated the cost of a long-term LLD Leasing, a rental with an LOA purchase option and a car loan in our exclusive comparison.

The advantage of a long-term rental LLD leasing

The advantage of a long-term rental LLD leasing

As we have shown, the advantage of a long-term rental is not financial. It mainly lies in the fact that you will not have to take care of anything, neither the maintenance nor the resale of your vehicle. Long-term rental is the price of tranquility.

Rental with option to buy can also be an opportunity to have fun for two years, for example by driving the car of your dreams. Even if the rents are paid in full in the case of a leasing or long-term rental, the rent remains cheaper than a monthly car loan which commits you much longer.

Rental with option to purchase LOA

Rental with option to purchase LOA

The principle of rental with option to purchase LOA

Leasing with an option to buy LOA, which is also called leasing (which is the English term meaning rental ), is a formula that resembles long-term rental but for which you can become owner at the end of your rental contract as with auto credit. This form of financing is indeed a consumer credit unlike long-term rental.

For rental with option to buy, you will sign a rental contract with a financial organization which will be the real owner of the car. To be able to use the vehicle as a LOA tenant, you will pay a monthly rent for the duration of the contract (3 to 5 years). On the same rental contract with purchase option, the amount of the purchase option will be fixed from the start. At the end of your LOA contract, if you wish to become the owner of your vehicle, you will have to pay this purchase option. The maintenance, repairs and insurance of the vehicle will be your responsibility.

In summary, the principle of rental with option to purchase LOA is therefore to access a new vehicle while postponing the decision to buy it or not. You will be able to see more and more in advertisements but the all-inclusive cost will always be more expensive regardless of the manufacturer, this is also what we have seen with the Peugeot LOA for example.

If you decide not to buy the vehicle, the principle of rental with option to purchase LOA is similar to long-term rental LLD and not car credit, rents are paid for the sole purpose of using the vehicle and therefore with lost funds.

If you decide to buy the vehicle, the principle of rental with option to purchase is similar to the Auto loan, but not to the best auto loan.

In case of default on a rental contract with LOA purchase option

If you are unable to pay certain rents for your rental with option to buy, you will have to pay penalties such as on a car loan.

If you find yourself completely unable to meet the rents of your rental with option to buy, the financial body owning the vehicle will seize it and you will have to reimburse all your late rents as well as penalties like for a credit self.

Another possibility to face these difficulties is to have your leasing transferred by specialized companies.

The reality of the costs of a rental contract with an LOA purchase option

The principle of a rental with an LOA purchase option is therefore to pay rent to take advantage of a car and not to decide whether or not to buy it until the end of the rental contract. This decision will be made based on the money you have already committed and the purchase option that remains to be paid. The latter is therefore very important. The purchase option being fixed as of the signature on rental contract with option of purchase LOA, be very vigilant with its amount otherwise, it is better to move towards a car loan.

Summary of what you will have to pay for a rental with an LOA purchase option:

  • use of a vehicle for 3, 4 or 5 years
  • the optional purchase option at the end of the contract to become an owner

Maintenance, insurance and repairs are your responsibility outside the rental contract with option to purchase LOA as a car loan. On the other hand, if you decide not to buy the vehicle, be sure to refurbish your vehicle otherwise you will have additional costs.

Finally, to also succeed in auto financing with variable geometry, a first increased rent can be proposed or imposed to ensure your financial solidity to offer you more advantageous offers.

Sales price data (including average discount) and second-hand resale prices (via argus or market prices like leboncoin) are easy to access. We therefore wanted to transparently compare the costs of a long-term rental, a rental with option to buy and a car loan. To find the cheapest, just use our auto credit comparator.

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